Suppose that peanuts are produced bay large number of small farmers in a perfect

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Suppose that peanuts are produced bay large number of small farmers in a perfectly competitive industry with identical technologies. The industry is currently in long run equilibrium at a price $37 per pound of peanuts. There are large numbers of additional farms who could enter the industry under the right conditions: in other words there is easy entry and exit. A congressional investigating committee holds hearings on the peanut industry and comes away appalled at the low level of profits one typical peanut farm. it proposes two alternatively remedial plans. Discuss each plan's effects on farm incomes. the price of peanuts the number of firms in the industry, etc Which plan do you favor Why The government stands ready to buy as many peanuts as farmers want to sell $ 42 per pound. Every year, the government will pay every active peanut farmer an annual subsidy $10,000

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Suppose that peanuts are produced bay large number of small farmers in a perfect

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