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Chapter 19: Q.1 - For Critical Thinking (page 416)

What do you suppose were the likely short-run adjustments to the removal of the cotton subsidy by Egyptian farmers who continued to devote all of their lands to agricultural crops?

Short Answer

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In the short-run adjustments to the removal of the cotton subsidy by Egyptian farmers who continued to devote all of their lands to agricultural crops were due to the elimination of the subsidy.

Step by step solution

01

Given Information

In the Short-run time frame, Egyptian ranchers altogether marked down their cotton supply as the value they were getting diminished impressively because of the end of the endowment.

02

Explanation

the supply curve of the cotton rancher was more than unit-versatile. This is on the grounds that; there was less contribution of fixed cost which incorporates machines, building and so forth. There was just agribusiness land which was a decent capital. Fixed cost, later on, could be utilized for some other use as opposed to creating the main cotton.

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Most popular questions from this chapter

Consider panel (a) of Figure 19-1. Use the basic definition of the price elasticity of demand to explain why the value of the price elasticity of demand is zero for the extremely rare situation of the vertical demand curve.

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