In western Kansas, corn can be grown in twoways with or without irrigation. Drylandfarmers, who do not irrigate their corn, havelong-run average costs ofLAČC=Q^2-20Q+105 and long-run marginalcosts of LMCd=3Q^2-40Q+105, where Q ismeasured in thousands of bushels. Farmerslucky enough to water rights or river accesshave lower costs: Their long-run average costis LACT=Q^2-16Q+67 and their long-runmarginal costs are LMCT=3Q^2-32Q+67.A) If the corn market is in long-runequilibrium,with both dryland and irrigatedcorn being grown, what must the price ofcorn be?B) How much economic rent will farmers withaccess to irrigation earn?C) Explain why irrigating farmers earneconomic rents, but will still earn zeroeconomic profits.

When there are two or more producers, the price charged is equal to the minimum LAC of the producer…

In western Kansas, corn can be grown in ways with or without irrigation. Dryland farmers, who do not irrigate their corn, ha long-run average costs of LAČC=Q^2-20Q+105 and long-run marg costs of LMC%=3Q^2-40Q+105, where Q measured in thousands of bushels. Farme

In western Kansas, corn can be grown in ways with or without irrigation. Dryland farmers, who do not irrigate their corn, ha long-run average costs of LAČC=Q^2-20Q+105 and long-run marg costs of LMC%=3Q^2-40Q+105, where Q measured in thousands of bushels. Farme

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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