Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 5SPA
To determine
The market price, output, quantity produced by each firm and the economic profit or loss of the firm.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The Weinandt Family Farm in Wynot, NE raises livestock and grows crops. Commonly grown crops in Nebraska are corn and soybeans. Suppose you are helping a farm similar to the Weinandt Farm make decisions about how much corn to grow this year. As an agricultural product, the market for corn meets the requirements of a perfectly competitive market.
A) Using the market data provided, create a market supply and demand graph.
B) What are the market equilibrium price and quantity?
C) Using the firm cost and quantity data, find FC, VC, ATC, AFC, AVC, and MC. Graph ATC, AFC, AVC, and MC.
D) Based on your answers in part c, between which quantities is ATC minimized?
E) Based on your answers in part c, between which quantities should the farm aim to produce?
F) Using the lower of these two quantities, caculate TR, TR, and the firm’s economic profit or loss.
G) Will the farm decide to grow corn or leave the fields bare? explain your answer
H) Will farms enter this market, leave the market, or…
The Weinandt Family Farm in Wynot, NE raises livestock and grows crops. Commonly grown crops in Nebraska are corn and soybeans. Suppose you are helping a farm similar to the Weinandt Farm make decisions about how much corn to grow this year. As an agricultural product, the market for corn meets the requirements of a perfectly competitive market.
A) Using the market data provided, create a market supply and demand graph.
B) What are the market equilibrium price and quantity?
C) Using the firm cost and quantity data, find FC, VC, ATC, AFC, AVC, and MC. Graph ATC, AFC, AVC, and MC.
D) Based on your answers in part c, between which quantities is ATC minimized?
E) Based on your answers in part c, between which quantities should the farm aim to produce?
F) Using the lower of these two quantities, caculate TR, TR, and the firm’s economic profit or loss.
G) Will the farm decide to grow corn or leave the fields bare? explain your answer
H) Will farms enter this market, leave the market, or…
In the U.S. economy consumers and producers are equally responsible for market prices and the number of units purchased (sold) in markets. Neither group has more market power than the other. Explain why you either agree or disagree with this statement.
Chapter 12 Solutions
Macroeconomics
Ch. 12.1 - Prob. 1RQCh. 12.1 - Prob. 2RQCh. 12.1 - Prob. 3RQCh. 12.1 - Prob. 4RQCh. 12.2 - Prob. 1RQCh. 12.2 - Prob. 2RQCh. 12.2 - Prob. 3RQCh. 12.3 - Prob. 1RQCh. 12.3 - Prob. 2RQCh. 12.3 - Prob. 3RQ
Ch. 12.4 - Prob. 1RQCh. 12.4 - Prob. 2RQCh. 12.5 - Prob. 1RQCh. 12.5 - Prob. 2RQCh. 12.5 - Prob. 3RQCh. 12.6 - Prob. 1RQCh. 12.6 - Prob. 2RQCh. 12.6 - Prob. 3RQCh. 12.6 - Prob. 4RQCh. 12 - Prob. 1SPACh. 12 - Prob. 2SPACh. 12 - Prob. 3SPACh. 12 - Prob. 4SPACh. 12 - Prob. 5SPACh. 12 - Prob. 6SPACh. 12 - Prob. 7SPACh. 12 - Prob. 8SPACh. 12 - Prob. 9SPACh. 12 - Prob. 10APACh. 12 - Prob. 11APACh. 12 - Prob. 12APACh. 12 - Prob. 13APACh. 12 - Prob. 14APACh. 12 - Prob. 15APACh. 12 - Prob. 16APACh. 12 - Prob. 17APACh. 12 - Prob. 18APACh. 12 - Prob. 19APACh. 12 - Prob. 20APACh. 12 - Prob. 21APACh. 12 - Prob. 22APACh. 12 - Prob. 23APA
Knowledge Booster
Similar questions
- Assume the market of digital clocks is perfectly competitive. (A) Show the market demand for and supply of clocks in a relevant diagram, Indicate the consumer surplus and producer surplus in this market. (b) Suppose there is an improvement on technology that lowers the marginal cost of producing clocks. How would the technological improvement affect the price, quantity transacted, consumer surplus and producer surplus in the market? Depict your answer in part(a) diagram. (c) Now, the clocks turns into a monopoly market, what are the effects on the price, quantity transacted as well as economic welfare in this market? Depict your answer in a relevant diagram.(such as C.S. , P.S. , T.S. , and DWL)arrow_forwardIn graph A below shows the market demand and supply in a competitive market, and graph B shows the cost curves of a representative firm in that industry. a. What are the market equilibrium price and quantity? Equilibrium price: $ Quantity traded:b. At equilibrium, what quantity is the firm producing? What is its total profit or loss? Leave no cells blank - be certain to enter "0" wherever required. Quantity: Total profit or loss $arrow_forwardGive typing answer with explanation and conclusion Which of the following characteristic(s) does not describe a competitive market? 1. A market where firms can freely enter or exit the market. 2. A market where firms sell a differentiated product. 3. A market with few buyers and sellers. 4. A market where firms sell a nearly identical product. Choices A.2 and 3 B.1, 2 and 3 C.1, 3, and 4arrow_forward
- A firm collect $300 by selling 5 bicycle and collect $330 by selling 6 bicycle. Is this seller in a perfectly competitive market?arrow_forwarda) Imagine that the price of input 1 is $16 per unit, the price of input 2 is $25 per unit, and the firm has fixed costs of $60. The firm is in a competitive market where the market price is $240 per unit of output. How much should the firm produce? How much profit does the firm make?arrow_forwardFirm Profit, Loss, and Shut Down Based upon the graph, answer the following questions: 1) What is the production level that will maximize the profit for the firm? 2) What is the profit-maximizing price the firm will charge? 3) Will the firm incur an economic gain or economic loss? 4) What will the dollar amount of economic gain or economic loss be? 5) What will be the price and quantity where the firm will shut down?arrow_forward
- Finding a life partner is a complicated process that may take many years. It is hard to think of this process as being part of a very complex market, with a demand and a supply for partners. Think about how this market works and some of its characteristics, such as search costs. Would you consider it a perfectly competitive market?arrow_forwardExamine the market structure of the corn market. Draw a suitable corn market and also an individual farmer’s demand and supply diagrams to illustrate the initial situation in the corn market where all farmers are earning normal profit.arrow_forwardIdentify and discuss the main features of the perfectly competitive market along with the basic demand and supply framework. 2. Carefully explain why the perfectly competitive market and the basic framework of supply and demand, examined in part one is not sufficient to analyze the market for health care. 3. Using illustrations, briefly discuss five (5) determinants of health.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)EconomicsISBN:9781305971493Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning