Tulip growing is perfectly competitive and all growers have the same costs. The market price is $25 a bunch, and each grower maximizes profit by producing 2,000 bunches a week. The average total cost is $20 a bunch, and the average variable cost is $15 a bunch. The minimum average variable cost is $12 a bunch. Please draw graphs where necessary.                                                                 What is the economic profit that each grower is making in the short run? What is the price at the grower’s shutdown point? What is each grower’s economic profit at the shutdown point?

USE THE GRAPH TO ANSWER THE FOLLOWING QUESTIONS: (IF REQUIRED, USE THE DISCREET NUMBER OF BARRELS). ANSWERS IN WHOLE NUMBER a. How many barrels of natural-organic oil reflect the lowest minimum average variable cost?b. How much is the price of the natural-organic oil per barrel?c. How much is the fixed cost to produce the natural-organic oil?d. How many barrels of natural-organic oil should the firm produce to maximize its profit?e. At what production level would the marginal cost exceed the average cost?

Question 3 Of 20 Luis and Sarah just purchased a piece of land and a tractor. They plan to start growing and selling organic peas. They have heard that the market for organic peas is perfectly competitive. What does that mean in terms of long-run profit? Firms will earn zero economic profit in the long run. Firms will earn positive economic profits in the long run. Firms will earn zero accounting profit in the long run. Firms will earn negative economic profits in the long run. Luis and Sarah want to know the quantity they should produce to maximize profit. As their economic advisor, you recommend that they O produce until marginal revenue is equal to price. produce as much as possible, regardless of cost. produce until marginal cost is equal to marginal revenue. produce until price falls below the average variable cost.

you've been learning about what makes a market perfectly competitive, how a firm in a perfectly competitive market makes profit-maximizing decisions, and how a perfectly competitive market moves towards equilibirium.    But how applicable is this to real life?   For this discussion, try to think of a market (for a product or service) that is perfectly competitive or very close to it.  What characteristics of the market make it like perfect competition?  Are there factors that keep it from being perfectly competitive?  If so, what are they?  How close do you think the firms in this market are to perfectly competitive firms in choosing equilibrium price and quantity?

Identify an industry that enjoys perfect (or nearly perfect) competition. How do the competitors interact with each other and suppliers and customers?

You read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following?  The profits of farmers based on what happens to the price, what do you think will happen to the profits earned by the firms/farmers that previously existed in the market?

If marginal profit is $33 and marginal revenue is $80 What's the value of Marginal cost

What quantity will the firm produce if it shuts down in the short run? What will be the profits if this firm shuts down? What quantity will the firm produce to minimize losses in the short run? If this firm chooses to operate at a loss, what will its profits equal? If the cost and revenue numbers in the table will continue permanently, what will this firm choose to do?

When would a profit-maximizing firm shut down in the short run?

In 2003, a single case in Alberta of bovine spongiform encephalopathy, also known as mad cow disease, temporarily shut down export markets for Canadian beef. a. Using firm and industry diagrams, show the short-run effect of declining demand for Canadian beef due to the shutdown of its export markets. Label the diagram carefully and write out in words all of the changes that you can identify. b. Although export markets eventually began to open up later that same year, the demand for Canadian beef remained low. On a new diagram, show the long-run effect of the declining demand. Explain in words.