Question

NEWS WIRE COMPETITIVE MARKETS Catfish Farmers Feel Forced Out of Business Also feeling the pinch from foreign imports and rising grain costs, Jerry Seamans is cutting back his 1,200 acres of catfish ponds by 20 percent and returning the acreage to soybeans and rice.... "I really don't know of a fish operation that's not changing," said Seamans, whose farm is just outside of Lake Village. "Some people are going out of business, several people are doing the same thing I'm doing. Most everybody in the business is trying to make major adjustments." At its peak in 2002, Arkansas' catfish industry numbered 195 operations covering 38,000 acres of ponds. The latest numbers from the U.S. Department of Agriculture show 128 catfish farms with 29,900 acres of ponds. Production has dropped from 106,821 pounds two years ago to the current 90,400 pounds. Source: TheFishSite.com, May 26, 2008. Used with permission of 5M Publishing. Under perfectly competitive scenarios firms exit the business when economic losses are incurred. According to the News Wire above, how many Arkansas catfish farms quit the business due to economic losses? ? farms

Answer 1

Answer: 67 farms

The number of operations dropped from 195 to 128 which means 195 – 128 = 67 catfish farms quit the business.