Compute the industry prices necessary to induce short-run, Ask an Expert

Economics

Farm fresh, Inc, supplies sweet peas to canneries located throughout the Mississippi River Valley. Like many gain and commodity markets, the market for sweet peas is perfectly competitive. With $250,000 in fixed costs, the company's total and marginal costs per ton (Q) are

TC = $250,000 + $200Q + $0.02Q^2
MC= dTC/dQ = $200 + $0.040Q

A. Compute the industry prices necessary to induce short-run quantities supplied by the firm of 5,000, 10,000, 15,000 tons of sweet peas. Assume that MC>AVC at every point along the firm's marginal cost curve and that total costs include a normal profit.

B. Compute short-run quantities supplied by the firm at industry prices of $200, $500 and $1,000 per ton.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9293389

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