with or without irrigation. In western Kansas, corn can be grown in two ways Dryland farmers, who do not irrigate their corn, have long-run average costs: LAC, = q² – 20q+105 and long-run marginal costs: LMC, = 3q² – 40q+105 | D where q is measured in thousands of bushels. Farmers lucky enough to have water rights or river access have lower costs: Their long-run average cost is LAC, = q² – 16q+67 and their long-run marginal cost is LMC, = 3q² – 32q+67 If the corn market is in long-run equilibrium, with both dryland and irrigated corn being sold, what must the price of corn be?
with or without irrigation. In western Kansas, corn can be grown in two ways Dryland farmers, who do not irrigate their corn, have long-run average costs: LAC, = q² – 20q+105 and long-run marginal costs: LMC, = 3q² – 40q+105 | D where q is measured in thousands of bushels. Farmers lucky enough to have water rights or river access have lower costs: Their long-run average cost is LAC, = q² – 16q+67 and their long-run marginal cost is LMC, = 3q² – 32q+67 If the corn market is in long-run equilibrium, with both dryland and irrigated corn being sold, what must the price of corn be?
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter3: Benefits, Costs, And Decisions
Section: Chapter Questions
Problem 9MC
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Transcribed Image Text:In western Kansas, corn can be grown in two ways – with or without irrigation.
Dryland farmers, who do not irrigate their corn, have long-run average costs:
LAC, = q² – 20q+105 and long-run marginal costs: LMC, = 3q² – 40q+105
D
where q is measured in thousands of bushels. Farmers lucky enough to have
water rights or river access have lower costs: Their long-run average cost is
LAC, = q² – 16q+67 and their long-run marginal cost is
LMC, = 3q° – 32q+ 67
-
If the corn market is in long-run equilibrium, with both dryland and irrigated
corn being sold, what must the price of corn be?
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