Question

2001 was a bad year for Red Delicious apple farmers in Washington State. The market price for Red Delicious apples was $10.61 per box. As a result, many farmers decided not to pick the apples off their trees and instead let them rot. Assuming that the Red Delicious apple market was perfectly competitive, is it possible that these farmers were profit maximizing when they decided to let their apples rot in the short-run

Answer 1

No

Step-by-step explanation:

Remember, when we say a firm is in a perfectly competitive market we imply that the firm has no overall dominance in the market but have other competitors who sell the same products.

Therefore the Delicious apple farmers would not be maximizing profit, if the Farmers deliberately left the produce to rot on the trees, as other competitors will likely supply the same products to the final consumers.

Answer 2

Answer: This statement is correct. Maximizing profit refers to short run or long run process by which a businessdetermine the price, input, and output levels that lead to the highest profit possible.

By choosing not to not to pick the apples off their trees and instead let them rot the farmers are in fact maximizing profits as picking them and selling might lead to loss.