A farmer in a perfectly competitive market experiences a significant drop in crop prices, leading to losses. What should the farmer consider doing in response to these economic losses to ensure long-term viability?

When a farmer faces a significant drop in crop prices, the first thing to consider is whether the prices are expected to stay low or if they will recover. If prices are likely to remain low for a long time, the farmer may need to think about reducing costs. This could involve cutting back on expenses, such as using less fertilizer or even downsizing the farm. Alternatively, the farmer might explore growing different crops that could sell for a better price. For example, if the price of corn drops but soybeans are still profitable, switching to soybeans could help the farmer stay in business.