Please answer questions D and E ONLY 2.) . ".average total cost of the typical wheat farm is ATC(Q) = + Q, its average variable cost isAVC(Q) = Q, and its marginal cost is MC(Q) = 2Q. Suppose that there are currently 500 activewheat farms in the market, and the market demand curve is given by PD = 20 – 0 Q°.Consider the market for wheat, which is approximately perfectly competitive. Thed.) How much profit will wheat farms earn when this market is in long-run equilibrium? Why?1000a.) What is the short-run market supply curve in this market?e.) Calculate the number of wheat fams that will be active in the long-run equilibrium of thismarket.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 competitiveequilibrium.

Answer: (d). The firms in perfect competition earn zero economic profit. It is because, in the long…

2., Consider the market for wheat, which is approximately perfectly competitive. The d.) How much profit will wheat famms earn when this market is in long-run equilibrium? Why? average total cost of the typical wheat farm is ATC(Q) = +Q, its average variable cost is AVC(Q) = Q, and its marginal cost is MC(Q) = 2Q. Suppose that there are currently 500 active wheat farms in the market, and the market demand curve is given by pD = 20 -0°. 1000 a.) What is the short-run market supply curve in 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.

2., Consider the market for wheat, which is approximately perfectly competitive. The d.) How much profit will wheat famms earn when this market is in long-run equilibrium? Why? average total cost of the typical wheat farm is ATC(Q) = +Q, its average variable cost is AVC(Q) = Q, and its marginal cost is MC(Q) = 2Q. Suppose that there are currently 500 active wheat farms in the market, and the market demand curve is given by pD = 20 -0°. 1000 a.) What is the short-run market supply curve in 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.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter12: Firms In Perfectly Competitive Markets

Section: Chapter Questions

Problem 9P

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