Your brother in law manages a corn farming business . At a recent family gathering , he confided in you that he is very happy because he expects a record crop of corn this year . Your brother in law is fully aware that all the corn farmers will have record crops as well . Why is he so happy ? Explain fully in 3 lines
If your brother in law is very happy because he expects a record crop of corn this year and he is fully aware that all the corn farmers will have record crops as well, then he is so happy because he think his profits will be higher, but as all farmers will have record crops too and the total supply of corn will increase, then the equilibrium price may decrease and total profits will be the same or even lower, if the demand for corn is inelastic.