Suppose the development of new drought-resistant hybrid seed corn leads to a 50-percent increase in the average yield per acre without increasing the cost to the farmers who use the new technology. If the conditions in the corn production industry are approximated by the price-taker model, which of the following is most likely to occur?
A) The price of corn will increase.
B) The price of soybeans (a substitute for corn) will increase.
C) The profits of corn farmers who quickly adopt the new technology will increase.
D) The profits of corn farmers who do not adopt the new technology will increase.

Question

Quizplus · Accepted Answer

Farmers who quickly adopt the new technology will initially experience increased profits due to higher yields without increased costs, while the market price of corn remains unchanged in the short term.

Suppose the Development of New Drought-Resistant Hybrid Seed Corn Leads