Fine Farm is a perfectly competitive producer of rice. The adjacent figure shows Fine Farm's marginal cost of growing rice. Fine Farmcannot store rice, so all the rice grown must be sold; however, the price of rice is unknown when the managers must make a decisionabout how much rice to grow. With a 50/50 chance, the price might be $600 per ton or $200 per ton. To maximize their expected profit,Fine Farm's managers will produceA. 100 tons of riceB. 700 tons of rice○ C. 100 tons of rice 50 percent of the time and 700 tons of rice the other 50 percent of the timeOD. 400 tons of ricePrice and cost (dollars per ton of rice)$700+$600-$500-$400-$300-$200-$100-$0+0100200 300 400 500 600 700Quantity (tons of rice per year)MCQ☑

Detailed explanation:Here's how to analyze the situation and determine Fine Farm's optimum…

Answered: Fine Farm is a perfectly competitive…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.1P: A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new...

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Your niece is deciding whether or not to open a lemonade stand. She expects to sell 20 cups of lemonade for $1 per cup. She already made a sign that cost her $10 and will have $15 worth of additional costs for cups and lemonade mix if she decides to open the stand. If your niece decides to open the lemonade stand, how much profit will she earn? Show how you arrived at this number. Should she open the lemonade stand? What kind of cost is the $10 spent on the lemonade stand sign?
Kasey Puzzle, Inc. sells geography-based puzzles. Kasey currently sells 25,000 units a month for $40 each, has variable costs of $20 per unit, and fixed costs of $300,000. Kasey Puzzle is considering increasing the price of its units to $60 per unit. This will not affect costs, but demand is expected to drop 20%. Should Kasey Puzzle increase the price of its product? с Multiple Choice O O Yes, profit will increase $500,000. No, profit will decrease $500,000. No, profit will decrease $300,000. Yes; profit will increase $300,000.
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Suppose that the market for frying pans is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point. 100 80 Profit or Loss 70 ATC 60 50 40 20 AVC 20 MC 10 10 12 QUANT TY Thousands of pans per dey 140 45 32 PRICE (Dollars per pan) 品导

Suppose that the fish processor could use a different production method that involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the boat tour would no longer be affected. If the fish processor uses the recycling method, then the fish processor's economic profit is $1,300 per week, and the boat tour's economic profit is $1,900 per week. If the fish processor does not use the recycling method, then the fish processor's economic profit is $1,600 per week, and the boat tour's economic profit is $1,100 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the fish processor's economic profit and the boat tour's economic profit combined) with and without recycling. Action Profit Fish Processor Boat Tour Total (Dollars) (Dollars) (Dollars) No Recycling 1,600 1,100 Recycling 1,300 1,900 Total economic profit is highest…
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Output AFC AVC ATC MC 1 300 100 400 100 2 150 75 225 50 3 100 70 170 60 4 75 73 148 80 5 60 80 140 110 6 50 90 140 140 7 43 103 146 180 8 38 119 156 230 9 33 138 171 290 10 30 160 190 360 Refer to the chart above. If the market price is $179, the per-unit economic profit at the profit maximizing output is what? 15 23 33 39
a donut shop charges customers the same price. the profit maximising output is 100 at a price of 5$ per donut. marginal cost is 2$. The donut shop owner now discovers that it has two very different types of customer children and adults . It can maximise its profits by selling 30 donuts to children for a price of 4$ per donut and 70 donuts per evening to everyone else for a price of 6$ per donut. Draw a diagram showing the profit-maximising price and output a) when all customers are charged the same price and b) when children are charged a different price c)How much profit does the donut shop owner make when children are charged a different price? explain how to draw the diagrams also in detail please!
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Using the data in the following table, show what happens to the firm's output choice and profit if the fixed cost of production increases from $100 to $120 to $140, where q is quantity and C is total cost. Assume that the price of output is $64. q 0 1 2 3 4 ܗ ܗ ܢ ܝ 7 8 9 10 11 If the fixed cost of production is $100, then output will be MC PREHRANS4EE 50 28 20 14 18 20 22 38 45 55 65 C (FC = $100) 100 150 178 198 212 230 250 272 310 355 410 475 C (FC = $120) 120 170 198 218 232 250 270 292 330 375 430 495 units (enter your response using an integer) C (FC = $140) 140 190 218 238 252 270 290 312 350 395 450 515
The accompanying table presents the expected cost and revenuedata for the Tucker Tomato Farm. The Tuckers produce tomatoesin a greenhouse and sell them wholesale in a price-taker market.a. Fill in the firm’s marginal cost, average variable cost,average total cost, and profit schedules.b. If the Tuckers are profit maximizers, how many tomatoesshould they produce when the market price is $500 perton? Indicate their profits.c. Indicate the firm’s output level and maximum profit if themarket price of tomatoes increases to $550 per ton.d. How many units would the Tucker Tomato Farm produce ifthe price of tomatoes fell to $450 per ton? What would bethe firm’s profits? Should the firm stay in business? Explain.

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