Consider the market for wheat, which is approximately perfectly competitive. The average total cost of the typical wheat farm is ATC(Q) = 1+ Q, its average variable cost is AVC(Q) = Q, and its marginal cost is MC(Q) = 2Q. Suppose that there are currently 500 active given by p = 20 -L0 d.) How much profit will wheat farms earn when this market is in long-run equilibrium? Why? wheat farms in the market, and the market demand curve 1000 a.) What is the short-run market supply curve this market? e.) Calculate the number of wheat farms that will be active in the long-run equilibrium of this market. b.) Compute the short-run competitive equilibrium in this market. c.) Compute the profit or loss of the individual wheat farms in the short-run competitive equilibrium.

Consider the market for wheat, which is approximately perfectly competitive. The average total cost of the typical wheat farm is ATC(Q) = 1+ Q, its average variable cost is AVC(Q) = Q, and its marginal cost is MC(Q) = 2Q. Suppose that there are currently 500 active given by p = 20 -L0 d.) How much profit will wheat farms earn when this market is in long-run equilibrium? Why? wheat farms in the market, and the market demand curve 1000 a.) What is the short-run market supply curve this market? e.) Calculate the number of wheat farms that will be active in the long-run equilibrium of this market. b.) Compute the short-run competitive equilibrium in this market. c.) Compute the profit or loss of the individual wheat farms in the short-run competitive equilibrium.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2.)
Consider the market for wheat, which is approximately perfectly competitive. The
d.) How much profit will wheat farms earn when this market is in long-run equilibrium? Why?
16
average total cost of the typical wheat farm is ATC(Q) = + Q, its average variable cost is
AVC(Q) = Q, and its marginal cost is MC(Q) = 2Q. Suppose that there are currently 500 active
wheat farms in the market, and the market demand curve is given by PD = 20 –
%3D
1000
a.) What is the short-run market supply curve in this market?
e.) Calculate the number of wheat farms that will be active in the long-run equilibrium of this
market.
b.) Compute the short-run competitive equilibrium in this market.
c.) Compute the pro
equilibrium.
or loss of the individual wheat farms in the short-run competitive

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