In east icicle, minnesota, on the northern edge of the corn belt, the growing season is short and the soil is poor. corn yields are meager unless a great deal of expensive fertilizer is used. in corncrib, illinois, the land is fertile and flat and the growing season is 20 days longer. for any given expenditure per acre, corn yields are far greater than in east icicle. market for corn is perfectly competitive, and farmers in both places are profit maximizers who only grow corn.

The answer is marginal costs in both places are the same. This is because the farmers in both places are profit-maximizers, the value in each flat is equal to MC or Marginal Cost and subsequently the market of corn is competitive, the price of corn in both places is the same. Also, marginal costs are higher in East Icicle than in Corncrib can also be a possible answer. For any given outflow per acre Corncrib’s corn yield are far better than in East Icicle, at any level of output, the marginal cost per acre in East Icicle must be higher in Corncrib, which suggests that in equilibrium the output level of corn in East Icicle is less than the output level of corn in Corncrib.