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A producer is in equilibrium when TC and TR are equal
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- Consider a competitive market for red lentils with 100 identical farmers in Horsham Victoria, a competitive market price of $5 and the following MC for each farmer: MC = $0.05Q Also consider the following market demand function: QD a) Calculate the optimal level of production (in tonnes) for each farmer (show workings) = = 1000 - 40P b) Assuming 100 lentil farmers of equal size how many tonnes of lentils in total will be supplied in the entire market? (show all workings) c) Consider that the government now imposes a 25% tax on producers, calculate i) the new equilibrium level of output for each firm (hint - think about how this affects each farmer's marginal cost), and ii) new total supply in the entire market (show all workings)Explain two ways how the market sometimes fails to produce the optimal mix output?The supply function for a product is 2p - 4 - 10 = 0. while the demand function for the same product is (p + 10)(4 + 30) = 7200. Find the market equilibrium point.
- Find producer's surplus at the market equilibrium point if supply function is p=3x+3 and the demand function is p = 100.8/(x+15)Show how could Market equilibrium be affected if the level of Technology is not used on effective way while the number of Consumers increased, ( the effect of Technology is higher than the other factor ) Enter your AnswerAssuming perfect competition in the market for Good A, let's assume that the equilibrium market price has been established. Assuming all other conditions remain constant (under the ceteris paribus assumption), let's suppose that the price of Good B, which is a substitute for Good A, increases. In this case, how does the equilibrium market price and quantity of Good A change? Show with the help of a graph.
- Show what happens in the short run on both graphs when a new medical study shows soybeans to be highly carcinogenic. On the market graph, you will shift a curve or curves. On the firm's graph, use Price 2 to draw a new price line for the firm. On both graphs, indicate the new equilibrium point with point B. Now, show the changes that get both graphs back to long‑run equilibrium. Use shift(s) for the market and Price 3 for the firm. Indicate the new long‑run equilibrium with point C.The many identical residents of Whoville love drinking Zlurp. Each resident has the following willingness to pay for the tasty refreshment: Quantity First bottle Second bottle Third bottle Fourth bottle Fifth bottle Further bottles Willingness to Pay (Dollars) 10 8 Each Whovillian will consume The cost of producing a bottle of Zlurp is $3.50, and the competitive suppliers sell it at this price. (The supply curve is horizontal.) 6 4 2 0 Producing Zlurp creates pollution. Each bottle has an external cost of $1. Taking this additional cost into account, total surplus per person in the allocation you previously determined decreases to S Cindy Lou Who, one of the residents of Whoville, decides on her own to reduce her consumption of Zlurp by 1 bottle. Cindy's consumer surplus (ignoring the cost of pollution she experiences) is now S by S Consumption per person is now person external cost of 5 bottles and receive a consumer surplus of $ Mayor Grinch imposes a $1 tax on each bottle of Zlurp.…New Zealand possums produce the highest quality fur, due to the large pelts per body size. Demand for New Zealand possums’ products has risen dramatically. This is partly a result of the conservation benefits of harvesting New Zealand possums. This has made the product seem more environment friendly than other fur products and boosted sales to concerned consumers. Assume that the possums market satisfies all the attributes of a competitive market. Further assume that high grade possum furs are the most expensive input into the possum fur production function. 1. Use a graph of the market for possum fur to demonstrate the effect of its environmentally friendly status on the market equilibrium. 2. Graph the reaction of an individual incumbent firm to the increase in market demand. In your graph, identify the firm’s revenue and cost structures. 3. What would you predict would happen to long-run industry supply if the price of possum fur increased as possum culling increased their…
- Suppose the market for quiche is perfectly competitive, so sellers take the market price as given. Hilary manages a restaurant that offers quiche for sale. The following graph plots Hilary's weekly supply curve (orange line). Point A represents a point along her supply curve. The price of quiche is $2.25 per slice, which is given by the black horizontal line. PRICE (Dollars per slice) 9.00 8.25 7.50 6.75 6.00 5.25 4.50 3.75 3.00 2.25 1.50 0.75 0 0 Price Supply 2 4 Hilary's Weekly Supply A 6 8 10 12 14 16 QUANTITY (Slices of quiche) 18 + 20 22 24 Using the previous graph, you can determine that Hilary is willing to supply her 6th weekly slice of quiche for $ per slice, the producer surplus earned from supplying the 6th slice of quiche is $ Suppose the price of quiche were to rise to $3.00 per slice. At this higher price, Hilary would receive a producer surplus of $ slice of quiche she sells. Since she receives $2.25 from the 6thSuppose that the inverse market demand for pumpkins is given by P = $10 - 0.05Q. Pumpkins can be grown by anybody at a marginal cost of $1.