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Assume that Raul Lopez is a soybean farmer in the Florida panhandle and that he operates under conditions of perfect competition. Please answer all THREE questions
a. If Raul discovers a new irrigation technique that reduces his AVC and ATC, how will the price at which he sells his product change? Why? What will happen to his output?
b. How will the market change if Raul shares his discovery with all soybean farmers? How will price and quantity sold in the soybean market change?
c. Explain and graphically illustrate how the market will adjust after the events in part c.
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