Sheila sells corn in a perfectly competitive market. This month Sheila receives a lower price for a bushel of corn than she did last month. This might have happened because

Question

Quizplus · Accepted Answer

A decrease in the market price for a good in a perfectly competitive market is usually a result of a decrease in market demand. This means that consumers are less willing and/or able to buy the good at higher prices, leading to a decrease in the equilibrium price. Since Sheila operates in a perfectly competitive market, she has no control over the market price and must accept the going rate. Therefore, a decrease in the market price for corn is not due to Sheila's actions or costs, but rather an external market force of decreased demand.

Sheila Sells Corn in a Perfectly Competitive Market