Suppose an avocado farm has cost C= 0.004q + 28q + 1250, (where q is measured in bushels) and the rental cost of land is zero so the average cost curve includes only the farm's costs of labor, capital, materials, and energy-not land. This cost structure is representative of all firms in this industry. The market price of avocados is $40 per bushel The firm's profit maximizing output is bushels of avocados (Round your response to one decimal place.)

Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 19PAE
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Suppose an avocado farm has cost
C= 0.0049° + 28q + 1250, (where q is measured in bushels)
and the rental cost of land is zero so the average cost curve includes only the farm's costs of labor, capital, materials, and energy-not land.
This cost structure is representative of all tirms in this industry.
The market price of avocados is $40 per bushel
The firm's proft maximizing output is bushels of avocados. (Round your response to one decimal place)
Transcribed Image Text:Suppose an avocado farm has cost C= 0.0049° + 28q + 1250, (where q is measured in bushels) and the rental cost of land is zero so the average cost curve includes only the farm's costs of labor, capital, materials, and energy-not land. This cost structure is representative of all tirms in this industry. The market price of avocados is $40 per bushel The firm's proft maximizing output is bushels of avocados. (Round your response to one decimal place)
In the long run, we would expect the market price of avocados to:
O A. remain unchanged.
O B. decrease
OC. Increase
OD. equal 2ero
Transcribed Image Text:In the long run, we would expect the market price of avocados to: O A. remain unchanged. O B. decrease OC. Increase OD. equal 2ero
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