part A,B,C Question 3.Suppose the wheat market in Brazil is a perfectly competitive industry, where a representa-tive firm in this market has the long run total cost function TC(q) = 100+q². The demandcurve for wheat in Brazil is given by Q5# = 600 – 10P. Finally, assume for now that, dueto high tariffs, there are no imports of wheat into Brazil or exports of wheat out of Brazil.a) Derive a representative firm's marginal cost and average total cost functions.b) In the long-run equilibrium, how much wheat does a single firm produce?c) Derive the long run equilibrium price and quantity of the Brazilian wheat market.Russia is one of the largest wheat producing countries. The long run supply curve forwheat in Russia is given by QU = 35P – 560, while the demand for wheat is given byQRU = 250 – 10P.d) Suppose there are no imports of wheat into Russia or exports of wheat out of Russia.Calculate the equilibrium price and quantity in the Russian wheat market.Now assume that the demand and supply in these two countries are given as above and thata new trade agreement is signed by them. According to the agreement, it costs t to ship aunit of wheat between the countries.e) If t = 0 (i.e., it costs zero to ship a unit of wheat between the countries), what are theequilibrium prices for wheat in Brazil and Russia? Also, how many units are eitherimported into Brazil or exported out of Brazil? (Hint: You may find sketching theaggregate demand and supply on a single diagram useful.)f) Same question as in e), but now assume it costs t1per unit to ship between thecountries.

In a long run perfect competition, price is equal to average cost (P = AC), where the average cost…

Suppose the wheat market in Brazil is a perfectly competitive industry, where a representa- tive firm in this market has the long run total cost function TC(q) = 100+ q². The demand curve for wheat in Brazil is given by Q## = 600 – 10P. Finally, assume for now that, due to high tariffs, there are no imports of wheat into Brazil or exports of wheat out of Brazil. a) Derive a representative firm's marginal cost and average total cost functions. b) In the long-run equilibrium, how much wheat does a single firm produce? c) Derive the long run equilibrium price and quantity of the Brazilian wheat market.

Suppose the wheat market in Brazil is a perfectly competitive industry, where a representa- tive firm in this market has the long run total cost function TC(q) = 100+ q². The demand curve for wheat in Brazil is given by Q## = 600 – 10P. Finally, assume for now that, due to high tariffs, there are no imports of wheat into Brazil or exports of wheat out of Brazil. a) Derive a representative firm's marginal cost and average total cost functions. b) In the long-run equilibrium, how much wheat does a single firm produce? c) Derive the long run equilibrium price and quantity of the Brazilian wheat market.

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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