Assume soybeans are produced by a perfectly competitive,constant-cost industry. Fresh Farm is a typical firm producingsoybeans and is currently operating with an economic loss.a. Using a correctly labeled graph for Fresh Farm, showeach of the following in the short run.i. The marginal cost curve and average total cost,labeled MC and ATC, respectivelyii. Fresh Farm's price and loss-minimizing quantity,labeled PF and QF, respectivelyiii. The average variable cost curve, labeled AVCb. Suppose that newspapers have recently reported thatexcessive soybean consumption can cause healthproblems. As a result, will the new loss-minimizingquantity for Fresh Farm be greater than, less than, orequal to QF in the short run? Explain.c. Is the long-run market supply for soybeans perfectlyinelastic, relatively inelastic, unit elastic, relativelyelastic, or perfectly elastic?d. Assume now that the soybean market is in a long-runequilibrium and that fertilizers used in soybeanproduction cause water pollution. Using a correctlylabeled graph for the soybean market, show each of thefollowing.I. Market equilibrium quantity and price, labeledQM and PMII. Marginal social cost curve, labeled MSCIII. Socially optimal quantity, labeled QsIV. The area representing deadweight loss, shadedcompletely Include correctly labeled diagrams, if useful orrequired, in explaining your answers. A correctlylabeled diagram must have all axes and curvesclearly labeled and must show directional changes.If the question prompts you to "Calculate," you mustshow how you arrived at your final answer.The table below shows the short-run production function forMichelle's Accounting Company.Number ofTotal Product perBookkeepersHour182204045565670765855(a) After which bookkeeper do diminishing marginal returnsbegin for Michelle's Accounting Company? Explain usingnumbers.(b) Assume Michelle's Accounting Company sells itsaccounting services in a perfectly competitive market at aprice of $20. Calculate the marginal revenue product of thesixth bookkeeper. Show your work.(c) Michelle's Accounting Company hires bookkeepers in aperfectly competitive labor market for bookkeepers at awage rate of $110 per hour, and the market price of servicesremains $20. How many bookkeepers will Michelle'sAccounting Company hire to maximize its profit? Explainusing marginal analysis.(d) Assume bookkeepers and accounting software aresubstitutes in providing accounting services by allaccounting firms in the market. If accounting software, afixed input, becomes less expensive and Michelle'sAccounting Company provides the same quantity ofaccounting services, will each of the following increase,decrease, or stay the same?(i) The wage rate Michelle's Accounting Company will pay itsbookkeepers. Explain.(ii) The demand curve for bookkeepers for Michelle'sAccounting Company. Explain.

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Assume soybeans are produced by a perfectly competitive, constant-cost industry. Fresh Farm is a typical firm producing soybeans and is currently operating with an economic loss. a. Using a correctly labeled graph for Fresh Farm, show each of the following in the short run. i. The marginal cost curve and average total cost, labeled MC and ATC, respectively ii. Fresh Farm's price and loss-minimizing quantity, labeled Pf and QF, respectively iii. The average variable cost curve, labeled AVC

Assume soybeans are produced by a perfectly competitive, constant-cost industry. Fresh Farm is a typical firm producing soybeans and is currently operating with an economic loss. a. Using a correctly labeled graph for Fresh Farm, show each of the following in the short run. i. The marginal cost curve and average total cost, labeled MC and ATC, respectively ii. Fresh Farm's price and loss-minimizing quantity, labeled Pf and QF, respectively iii. The average variable cost curve, labeled AVC

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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