Suppose researchers find a cheaper way to feed cows. In the long-run, who stand to benefit...

Suppose researchers find a cheaper way to feed cows. In the long-run, who stand to benefit from this innovation? (assume dairy market is perfectly competitive)

farmers

buyers of milk

both farmers and buyers of milk equally

impossible to answer with the information given

reduce output

expand output

Solutions

Expert Solution

BUyers of the milk will benefit as the firms will be earning zero profit in the long run as well. its the buyers that will get a lower price and higher output, the answer is "A".

Rahul Sunny answered 1 year ago

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