Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Textbook Question
Chapter 9, Problem 6CQ
Suppose that the development of a new drought-resistant hybrid seed corn leads to a 50 percent increase in the average yield per acre without increasing the cost to the farmers who use the new technology. If the producers in the corn production industry were price takers, what would happen to the following?
- a. the price of corn
- b. the profitability of corn farmers who quickly adopt the new technology
- c. the profitability of corn farmers who are slow to adopt the new technology
- d. the price of soybeans, a substitute product for corn
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4. The Diversified Vegetable Company grows two crops, tomatoes and zucchini. The firm is a price-taking seller. The price of a bushel of tomatoes is $20, while the price of a bushel of zucchini is $30. The firm uses the same land and the same workers to raise the two crops, and its total cost for the two crops is 5XT2 + 6XZ2 + XTXZ, where XT and XZ are the respective quantities of tomatoes and zucchini.
Find the following:
A. The profit maximizing level of production of tomatoes and zucchini.
B. The maximized profits.
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Chapter 9 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
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