Consider the market for wheat, which is approximately perfectly competitive. The average total cost of the typical wheat farm is ATC(Q) = 1+ Q, its average variable cost is AVC(Q) = Q, and its marginal cost is MC(Q) = 2Q. Suppose that there are currently 500 active given by p = 20 -L0 d.) How much profit will wheat farms earn when this market is in long-run equilibrium? Why? wheat farms in the market, and the market demand curve 1000 a.) What is the short-run market supply curve this market? e.) Calculate the number of wheat farms that will be active in the long-run equilibrium of this market. b.) Compute the short-run competitive equilibrium in this market. c.) Compute the profit or loss of the individual wheat farms in the short-run competitive equilibrium.

Consider the market for wheat, which is approximately perfectly competitive. The average total cost of the typical wheat farm is ATC(Q) = 1+ Q, its average variable cost is AVC(Q) = Q, and its marginal cost is MC(Q) = 2Q. Suppose that there are currently 500 active given by p = 20 -L0 d.) How much profit will wheat farms earn when this market is in long-run equilibrium? Why? wheat farms in the market, and the market demand curve 1000 a.) What is the short-run market supply curve this market? e.) Calculate the number of wheat farms that will be active in the long-run equilibrium of this market. b.) Compute the short-run competitive equilibrium in this market. c.) Compute the profit or loss of the individual wheat farms in the short-run competitive equilibrium.

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 8PA

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