CHAPTER EIGHT I Perfect Competition 18. The following graph shows the output for Pat, a profit-maximizing corn farmer МC АТC 8 1 AVC 2 I 1 0 4 8 16 12 20 Quantity (tonnes per year) a. Suppose the corn market consists of 1000 farms, including and identical to Pat's. In the table below, determine the market supply in column 2 b. If the market demand for corn is as shown in column 3 of the table below, at equilibrium price how much will Pat produce? Is she generating a profit or a loss? How much will the market produce? Is the market generating a profit or a loss? (3) (2) (1) Market Supply (tonnes per year) Market Demand Price (tonnes per year) ($) 19 O00 2 15 000 4 12 000 6 10 000 8 7 000 10 Givennhe resuits from part (b), what will happen to the corn market in the long tun nner Price and Cost (S per unit) 10 CO

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The following graph shows the output for Pat, a profit-maximizing corn farmer.

 

1. Suppose the corn market consists of 1000 farms, including and identical to Pat's. In the table below determince the supply in column 2.

 

2. If the market demand for corn is shown in column 3 of the table below, at equilibrium price how much will Pat produce? Is she generating a profit or a loss ? How much will the market produce? Is the market genearting a profit or a loss ?

3. Given the results from part (b), what will happen to the corn market in the long run ?

CHAPTER EIGHT I Perfect Competition
18. The following graph shows the output for Pat, a profit-maximizing corn farmer
МC
АТC
8
1
AVC
2
I
1
0
4
8
16
12
20
Quantity (tonnes per year)
a. Suppose the corn market consists of 1000 farms, including and identical to
Pat's. In the table below, determine the market supply in column 2
b. If the market demand for corn is as shown in column 3 of the table below, at
equilibrium price how much will Pat produce? Is she generating a profit or a loss?
How much will the market produce? Is the market generating a profit or a loss?
(3)
(2)
(1)
Market Supply
(tonnes per year)
Market Demand
Price
(tonnes per year)
($)
19 O00
2
15 000
4
12 000
6
10 000
8
7 000
10
Givennhe resuits from part (b), what will happen to the corn market in the
long tun nner
Price and Cost
(S per unit)
10
CO
Transcribed Image Text:CHAPTER EIGHT I Perfect Competition 18. The following graph shows the output for Pat, a profit-maximizing corn farmer МC АТC 8 1 AVC 2 I 1 0 4 8 16 12 20 Quantity (tonnes per year) a. Suppose the corn market consists of 1000 farms, including and identical to Pat's. In the table below, determine the market supply in column 2 b. If the market demand for corn is as shown in column 3 of the table below, at equilibrium price how much will Pat produce? Is she generating a profit or a loss? How much will the market produce? Is the market generating a profit or a loss? (3) (2) (1) Market Supply (tonnes per year) Market Demand Price (tonnes per year) ($) 19 O00 2 15 000 4 12 000 6 10 000 8 7 000 10 Givennhe resuits from part (b), what will happen to the corn market in the long tun nner Price and Cost (S per unit) 10 CO
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