issues in other chapters. However, the theoretical efficiency of perfect competition does provide a useful

benchmark for comparing the issues that arise from these real-world problems.

BRING IT HOME

A Dime a Dozen
A quick glance at Table 8.12 reveals the dramatic increase in North Dakota corn production—almost a tenfold

increase since 1972. Recent allocation of land to corn (as of mid-2019) is estimated to have increased to more than
208 8 • Perfect Competition

4 million acres. Taking into consideration that corn typically yields two to three times as many bushels per acre as

wheat, it is obvious there has been a significant increase in bushels of corn. Why the increase in corn acreage?

Converging prices.

Year Corn (millions of acres)

1972 495,000

2013 3,850,000

TABLE 8.12 (Source: USDA

National Agricultural Statistics

Service)

Historically, wheat prices have been higher than corn prices, offsetting wheat’s lower yield per acre. However, in
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