Time remaining: 00 :07 :05 Economics Assume that the market for Wheat is perfectly competitive in a country. Each firm operating in the Wheat market has the following cost curves: ATC(Q) = 1000/Q + 200 − 10Q + Q2/3, MC(Q) = 200 − 20Q + Q2, AV C(Q) = 200 − 10Q + Q2/3. The minimums of the cost curves are attained at the following quantity levels: MC attains its minimum at Q = 10 and MC(10) = 100, AVC attains its minimum at Q = 15 and AV C(15) = 125, and ATC attains its minimum at Q ≈ 19 (≈ denotes approximate equality) and ATC(19) ≈ 183. Based on the above information, answer the following questions. (a) What is the price level P ̄ for Wheat, such that any firm operating in this market chooses shut down below P ̄? Explain. (b) Assume the price of Wheat is 200. Calculate the quantity supplied by each firm operating in this market. Show your workings. (c) What is the equilibrium price in this market in the long run. Explain.
Time remaining: 00 :07 :05 Economics Assume that the market for Wheat is perfectly competitive in a country. Each firm operating in the Wheat market has the following cost curves: ATC(Q) = 1000/Q + 200 − 10Q + Q2/3, MC(Q) = 200 − 20Q + Q2, AV C(Q) = 200 − 10Q + Q2/3. The minimums of the cost curves are attained at the following quantity levels: MC attains its minimum at Q = 10 and MC(10) = 100, AVC attains its minimum at Q = 15 and AV C(15) = 125, and ATC attains its minimum at Q ≈ 19 (≈ denotes approximate equality) and ATC(19) ≈ 183. Based on the above information, answer the following questions. (a) What is the price level P ̄ for Wheat, such that any firm operating in this market chooses shut down below P ̄? Explain. (b) Assume the price of Wheat is 200. Calculate the quantity supplied by each firm operating in this market. Show your workings. (c) What is the equilibrium price in this market in the long run. Explain.
Chapter1: Making Economics Decisions
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Economics
Assume that the market for Wheat is perfectly competitive in a country. Each firm operating in the
Wheat market has the following cost curves :
ATC (Q) = 1000/Q + 200 − 10Q + Q2/3, MC(Q) = 200 − 20Q + Q2,
AV C(Q) = 200 − 10Q + Q2/3.
The minimums of the cost curves are attained at the following quantity levels: MC attains its minimum at Q = 10 and MC(10) = 100, AVC attains its minimum at Q = 15 and AV C(15) = 125, and ATC attains its minimum at Q ≈ 19 (≈ denotes approximate equality) and ATC(19) ≈ 183.
Based on the above information, answer the following questions.
(a) What is the price level P ̄ for Wheat, such that any firm operating in this market chooses
shut down below P ̄? Explain.
(b) Assume the price of Wheat is 200. Calculate the quantity supplied by each firm operating
in this market. Show your workings.
(c) What is the equilibrium price in this market in the long run. Explain.
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