The graph below shows the cost curve phases occurring during the process of the technology treadmill when there is a fixed government price. Using the graph, answer the questions below. Price 105 ● * શ્રુ છુ ૩ 95 85 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 0 5 10 15 20 25 30 Quantity 35 40 45 50 55 Guaranteed price = Label the graphs #1, #2, #3, #4 & #5 based on the order of the changes that happen when a firm adopts a technology (from the initial technology) and expands her operation up to the point where there is no need to further expand. Draw the initial guaranteed market price if the government establishes wants to ensure zero economic profit based on the original technology. Write the value below the graph in the space provided. When firms start competing for land and it results in an increase in land prices, show what happens to the cost curves of the grower who adopted the technology but did not expand her operation. Do this by carefully drawing any resulting shifts of the graphs or using any existing graph and indicating which of those graphs is the correct one (using the labels you attached).

The graph below shows the cost curve phases occurring during the process of the technology treadmill when there is a fixed government price. Using the graph, answer the questions below. Price 105 ● * શ્રુ છુ ૩ 95 85 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 0 5 10 15 20 25 30 Quantity 35 40 45 50 55 Guaranteed price = Label the graphs #1, #2, #3, #4 & #5 based on the order of the changes that happen when a firm adopts a technology (from the initial technology) and expands her operation up to the point where there is no need to further expand. Draw the initial guaranteed market price if the government establishes wants to ensure zero economic profit based on the original technology. Write the value below the graph in the space provided. When firms start competing for land and it results in an increase in land prices, show what happens to the cost curves of the grower who adopted the technology but did not expand her operation. Do this by carefully drawing any resulting shifts of the graphs or using any existing graph and indicating which of those graphs is the correct one (using the labels you attached).

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter5: Buying The Necessities

Section: Chapter Questions

Problem 20AA

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