Question regarding the competitive market definition

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HoneyBee Farms, a medium-size producer of honey, operates in a market that fits the competitive market definition relatively well. However, honey farmers are assisted by support prices above the price that would prevail in the absence of controls. The owner of HoneyBee Farms, as well as some other honey producers, complain that they can't make a profit even with these support prices. Explain why. Explain why even higher support prices would not help honey farmers in the long run.

The New York City Parks Department doubled the annual fee for the hot-dog pushcart that had the exclusive license for the spot just south of the Metropolitan Museum of Art to $288,000. Why would anyone pay almost $300,000 for a pushcart license? Who is obtaining the economic rent for the obviously lucrative pushcart location? How much economic profit is the pushcart owner probably earning?

Reference no: EM13894050

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