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A March 25, 2010 Article at SunSentinel

question 98

Essay

A March 25, 2010 article at SunSentinel.com reported, "Strawberry farmers in Florida are facing such a sharp collapse in prices for their berries that many are deciding to simply leave huge tracts of the berries to rot in the fields. . . Wholesale prices that were $17 to $19 for a flat of eight containers have now fallen to $5 to $6 a flat."
a. Why can't a strawberry farmer simply charge a higher price for their strawberries?
b. What would likely happen to the profits of strawberry farmers if they picked the strawberries and sold them in the market?
c. Graphically illustrate the situation facing a typical strawberry farmer, using the farmer's demand curve, and ATC and AVC curves.


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