1. Competitive market, Practice Question Wheat farmer Joe has the cost function of C(q) = 160,000 + 100q+q² The market for wheat is competitive and there are many farmers like this, with the same cost function. The demand function is Q = 15000 - 10p. (a) In the short run, below which price should Joe shut down? (b) In the short run, there are 19 farmers like Joe (so 20 farmers in total). How much should Joe produce? What will the price be? (c) What is the price below which Joe would shut down in the long run? (d) How many farmers will operate in the long run? (e) What is the market elasticity of demand at long-run equilibrium point?
1. Competitive market, Practice Question Wheat farmer Joe has the cost function of C(q) = 160,000 + 100q+q² The market for wheat is competitive and there are many farmers like this, with the same cost function. The demand function is Q = 15000 - 10p. (a) In the short run, below which price should Joe shut down? (b) In the short run, there are 19 farmers like Joe (so 20 farmers in total). How much should Joe produce? What will the price be? (c) What is the price below which Joe would shut down in the long run? (d) How many farmers will operate in the long run? (e) What is the market elasticity of demand at long-run equilibrium point?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Any help with D), and E) will be appreciated
Transcribed Image Text:1. Competitive market, Practice Question
Wheat farmer Joe has the cost function of C(q) = 160,000 + 100q+q²__ The
market for wheat is competitive and there are many farmers like this, with the same
cost function. The demand function is Q = 15000 - 10p.
(a) In the short run, below which price should Joe shut down?
(b) In the short run, there are 19 farmers like Joe (so 20 farmers in total). How much
should Joe produce? What will the price be?
(c) What is the price below which Joe would shut down in the long run?
(d) How many farmers will operate in the long run?
(e) What is the market elasticity of demand at long-run equilibrium point?
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