Economics 13th Edition by James Gwartney, Richard Stroup, Russell Sobel, David Macpherson

Exercise 5

Suppose that the development of a new drought-resistant hybrid seed corn leads to a 50 percent increase in the average yield per acre without increasingthe cost to the farmers who use the new technology. If the producers in the corn production industry were price takers, what would happen to the following?
a. the price of corn
b. the profitability of corn farmers who quickly adopt the new technology
c. the profitability of corn farmers who are slow to adopt the new technology
d. the price of soybeans, a substitute product for corn