In the U.S. agribusiness industry the farmer is a price taker and the businesses selling to...

In the U.S. agribusiness industry the farmer is a price taker and the businesses selling to and buying from farmers are price makers. True or False?

Expert Solution

False

In United State agribusiness industry the farmer is a price taker and the business selling to and buying from farmers are price maker. Is not true.

Because
Farmers being in their crops which are then weighted if grains have been dried before they are brought to the market they will bring a higher prices but in all cases the prices are determined by the worldwide market for these crops. Payment for these crops is made in in connection with government contracts and subsidy plans. Most agricultural market are perfectly competitive meaning that homogeneous product is produced by and for men sellers and buyers. The market is characterized by free entry and exist with producers obligated to be price takers.the large number of sellers create a situation where one form does not have the power to influence total supply to an extent that is significant enough to allow the individual to effect changes in price level.

Rahul Sunny answered 6 months ago

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