Fresno County, California is the largest agricultural producing county in the country and almonds are an important crop with more than 99,000 acres harvested. Each acre produces about a ton of almonds and sold at a price of $4300 a ton. The Sagardia Brothers grew 600 acres of almonds. What would happen if the Sagardia Brothers priced their almonds at $4000 a ton? They will not sell any almonds. Profits will be higher than when they sell them at the higher price. The quantity sold will be higher. They will sell the same amount of almonds, but profits will be lower.

Fresno County, California is the largest agricultural producing county in the country and almonds are an important crop with more than 99,000 acres harvested. Each acre produces about a ton of almonds and sold at a price of $4300 a ton. The Sagardia Brothers grew 600 acres of almonds. What would happen if the Sagardia Brothers priced their almonds at $4000 a ton? They will not sell any almonds. Profits will be higher than when they sell them at the higher price. The quantity sold will be higher. They will sell the same amount of almonds, but profits will be lower.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 12P

See similar textbooks

Similar questions

Paulina sells beef in a competitive market where the price is $6 per pound. Her total revenue and total costs are given in the table below. Quantity of beef (lb.) 0 1 2 3 4 Total revenue ($) Total cost ($) 0 4 (A) 1 pound (B) 2 pounds (C) 3 pounds (D) 4 pounds 6 12 18 24 6 10 15 21 What is the profit-maximizing (or loss minimizing) quantity? Profit ($) Marginal revenue ($) Marginal cost ($) Marginal profit ($)
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $30, $20, $10, $5, and $3 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $10, $20, $30, $38, and $44 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Quantity Demanded Quantity Supplied (widgets) Price ($ per widget) $3 $5 $10 $20 $30 $38 $44 (widgets)
Paulina sells beef in a competitive market where the price is $6 per pound. Her total revenue and total costs are given in the table below. Quantity of beef (lb.) 0 1 2 3 4 A What is the profit-maximizing (or loss minimizing) quantity? B 1 pound 2 pounds 3 pounds Total revenue ($) Total cost ($) 0 4 6 6 12 10 18 15 24 21 D) 4 pounds Profit ($) Marginal revenue ($) Marginal cost ($) Marginal profit ($)
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a purely competitive firm that produces novelty ear buds. Assume the market for novelty ear buds is a competitive market and that the price of ear buds is $6.00 per pair. Quantity of Ear Buds MC ($) ATC ($) 10 - 5.00 15 2.00 4.00 20 2.44 3.61 25 3.56 3.60 30 4.02 3.67 35 5.49 3.93 40 5.93 4.18 45 8.59 4.67 Instructions: In part a, enter your answer as the closest given whole number. In parts b–d, round your answers to two decimal places. a. If Buddies wants to maximize profits, how many pairs of ear buds should it produce each week? _ pairs b. At the profit-maximizing quantity, what is the total cost of producing ear buds? $ _ c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what will Buddies profit or loss be per week? $ _ d. Now assume the market price is $5.50 per…
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell one widget at the following prices: $18, $14, $12, $6, and $3 (one seller at each price). Five buyers are willing to buy one widget at the following prices: $12, $14, $18, $28, and $34 (one buyer at each price). For each price shown in the following table, use the given information to enter the quantity demanded and quantity supplied. Quantity Demanded Quantity Supplied (widgets) (widgets) Price ($ per widget) $3 $6 $12 $14 $18 $28 $34 In this market, the equilibrium price will be per widget, and the equilibrium quantity will be 4 5 0 3 1 2 widgets.
The pen industry is an increasing cost industry. If a pen is an inferior good, and consumer's incomes permanently increase, the equilibrium price of a pen ____ in the long run, the equilibrium quantity of pens ______in the long run, and the number of firms in the market ____ in the long run. Word Bank: Decreases, Decreases, Decreases, Increases, Increases, Increases, does not change, does not change, does not change.
Paulina sells beef in a competitive market where the price is $5 per pound. Her total revenue and total costs are given in the table below. Quantity of beef (lbs.) 0 1 2 3 4 Total revenue ($) 0 5 10 15 20 Total cost ($) 4 7 a. Fill out the table. 11 16 23 Profit ($) Marginal revenue ($) Marginal cost ($) Instructions: Round your answers to the nearest dollar and include a negative sign if appropriate. b. At what quantity does marginal revenue equal marginal cost? pounds. Marginal profit ($)
What is meant by selling cost? Name one market where selling cost is applicable
Most raisins in the U.S. are produced in California. Raisins come from grapes, in a fairly simple process: grapes grow on vines; at harvest time, workers cut the bunches of grapes down; they spread them out in the sun for a couple of weeks until the grapes shrivel up and become raisins; the raisins are then packed into boxes and sold to consumers. But here’s the thing: California raisin growers have a cartel. And it is a legal cartel, based on a law passed in 1937 during the Great Depression. That law says that raisin growers are exempt from U.S. anti-trust law. So here is what the raisin growers do. They harvest their raisins. Then they have a big meeting of all the growers (called the Raisin Administrative Committee). At this meeting they decide how much of their raisin crop they are actually going to sell. Usually they decide that they will not sell their entire crop – in some years they decide that they will only sell half of it. Whatever they don’t sell goes into storage as a…
13. You just got a patent for the first commercial self-driving car. The following table shows the elasticity of the demand and the marginal cost of production of your cars in several production centers across the globe. Assuming that this are constant, can you approximate what would be the optimal price for your cars? City Marginal Cost Elasticity Price Wolfburg, Germany Barcelona, Spain Tokyo, Japan Ulsan, South Korea East London, South Africa Mexico City, Mexico $20, 000 $18, 000 $22, 000 $16, 000 $10, 000 $12, 000 -1.5 $60, 000.00 $24, 000.00 $33, 000.00 $32, 000.00 $11, 428.60 $14, 400.00 -4.0 -3.0 -2.0 -8.0 -6.0
Paulina sells beef in a competitive market where the price is $8 per pound. Her total revenue and total costs are given in the table below. Quantity of Total revenue Total cost beef (lb.) 0 1 2 3 4 ($) 0 8 16 24 32 ($) 4 8 13 19 27 Profit ($) 0 8 pounds Marginal revenue ($) c. What is the profit-maximizing (or loss-minimizing) quantity? Marginal Marginal cost ($) profit ($) a. Complete the table. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. b. At what quantity does marginal revenue equal marginal cost? pounds A
Using the graph on the next page, do the following problems: Determine the profit maximizing level of output when the market price for the good is $75/unit. Show this on the graph by making the appropriate drawing (with a straight-edge). Also, write the number (an appropriate estimate should be made) below the graph. • On the graph, show the maximum total profit that can be generated by the firm based on the market price. Do NOT calculate the value - show the appropriate box on the graph. Be careful in your (straight) lines. Be clear as to the part of the graph that represents the profit. Use shading as appropriate. • Below the graph, write the interpretation of the values of the marginal cost (MC) and the average total cost (ATC) at the profit-maximizing level of output; make sure to use all the appropriate names and units. Write the values and interpretations below the graph. • Answer the following questions: If the market price of the good falls, the profit maximizing level of…