1. Competitive market, Practice Question Wheat farmer Joe has the cost function of C(q) = 160,000 + 100q + q²__ The market for wheat is competitive and there are many farmers like this, with the same cost function. The demand function is Q = 15000 - 10p. (a) In the short run, below which price should Joe shut down? (b) In the short run, there are 19 farmers like Joe (so 20 farmers in total). How much should Joe produce? What will the price be? (c) What is the price below which Joe would shut down in the long run? (d) How many farmers will operate in the long run? (e) What is the market elasticity of demand at long-run equilibrium point?
1. Competitive market, Practice Question Wheat farmer Joe has the cost function of C(q) = 160,000 + 100q + q²__ The market for wheat is competitive and there are many farmers like this, with the same cost function. The demand function is Q = 15000 - 10p. (a) In the short run, below which price should Joe shut down? (b) In the short run, there are 19 farmers like Joe (so 20 farmers in total). How much should Joe produce? What will the price be? (c) What is the price below which Joe would shut down in the long run? (d) How many farmers will operate in the long run? (e) What is the market elasticity of demand at long-run equilibrium point?
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Firms In Competitive Markets
Section: Chapter Questions
Problem 7PA
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning