Perfect Competition

When corn prices in the U.S. increased by almost 75% from 2010 to 2012, the number of acres planted in corn increased by over 9 million acres. When corn prices decreased by about 30% from 2012 to 2014, corn average decreased by over 5 million acres. Using your Good Economic Sense and Supply-Demand analysis, explain why the number of acres planted in corn changes. (Use short-run and long-run effects)

Monopoly

Eighty-five percent of the soup sold in the U.S. is Campbell's brand soup. Some people have claimed that Campbell's nearly has a monopoly in the soup market. What kind of evidence could we use to determine whether Campbell Soup Company is a monopoly or not? Explain. (Hint: Obviously Campbell's is not a pure monopoly since there are other soups besides Campbell's. But Campbell Soup may nonetheless have a great deal of monopoly power; that is, it may be able to act very much like a monopoly. To answer this question, think of what a monopoly can do that firms in a perfectly competitive market cannot do.)