In 1973, two American scientists, Herbert Boyer and Stanley Cohen produced the first genetically modified organism in human history - a bacterium. Scientific advances quickly followed in their wake. The first genetically engineered animal (a mouse) was developed in 1974 and the first genetically engineered plant (a breed of tobacco) was developed in 1983. Around the same time, in 1980, the US Supreme Court allowed patenting of genetically engineered organisms. These developments let the genie out of the bottle for the seed industry. Noticing the potential to gain a monopoly position in the seed market, biotech companies began purchasing traditional seed producers and developing genetically modified crop seeds in late 80s. They were so successful in acquiring or merging with the traditional seed companies that soon there were only 6 major producers left in the entire seed industry: Monsanto, Bayer, BASF, Dow, DuPont and Syngenta. a. In the market for corn seeds, Monsanto is close to being a monopolist in the United States. Draw the demand curve, the marginal revenue curve, and the cost curve of Monsanto to illustrate the quantity they choose to produce and the price they choose to charge. Is their price greater or equal to their marginal cost? Is the quantity of corn seeds they produce greater or less than the quantity that would be produced in a more competitive market? please provide demand curve

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In 1973, two American scientists, Herbert Boyer and Stanley Cohen produced the first genetically modified organism in human history - a bacterium. Scientific advances quickly followed in their wake. The first genetically engineered animal (a mouse) was developed in 1974 and the first genetically engineered plant (a breed of tobacco) was developed in 1983. Around the same time, in 1980, the US Supreme Court allowed patenting of genetically engineered organisms. These developments let the genie out of the bottle for the seed industry. Noticing the potential to gain a monopoly position in the seed market, biotech companies began purchasing traditional seed producers and developing genetically modified crop seeds in late 80s. They were so successful in acquiring or merging with the traditional seed companies that soon there were only 6 major producers left in the entire seed industry: Monsanto, Bayer, BASF, Dow, DuPont and Syngenta. a. In the market for corn seeds, Monsanto is close to being a monopolist in the United States. Draw the demand curve, the marginal revenue curve, and the cost curve of Monsanto to illustrate the quantity they choose to produce and the price they choose to charge. Is their price greater or equal to their marginal cost? Is the quantity of corn seeds they produce greater or less than the quantity that would be produced in a more competitive market? please provide demand curve

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