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Microeconomics Theory Assignment Fall 2020
Microeconomics Theory Assignment Fall 2020
The Weinandt Family Farm in Wynot, NE raises livestock and grows crops. Commonly grown crops in Nebraska are corn and soybeans. Suppose you are helping a farm similar to the Weinandt Farm make decisions about how much corn to grow this year. As an agricultural product, the market for corn meets the requirements of a perfectly competitive market.
- a) Using the market data provided, create a market supply and demand graph.
- b) What are the market equilibrium price and quantity?
- c) Using the firm cost and quantity estimates, find FC, VC, ATC, AFC, AVC, and MC. Graph ATC, AFT, AVC, and MC.
- d) Based on your answers in part c, between which quantities is ATC minimized?
- e) Based on your answers in part c, between which quantities should the farm aim to produce?
- f) Using the lower of these two quantities, estimate TR, TC, and Profit/Loss.
- g) Will the farm decide to grow corn or leave the fields bare? Explain your answer.
- h) Will farms enter this market, leave the market, or remain constant? Explain your answer.
Microeconomics Theory Assignment Fall 2020
| QD (millions of bu) | QS (millions of bu) | Price/bu | Firm q (thousands of bu) | TC | FC | VC | ATC | AFC | AVC | MC | |
| 0 | 6000 | 10 | 0 | 10000 | |||||||
| 200 | 5700 | 9.5 | 0.5 | 10128 | |||||||
| 400 | 5400 | 9 | 1 | 10505 | |||||||
| 600 | 5100 | 8.5 | 1.5 | 11133 | |||||||
| 800 | 4800 | 8 | 2 | 12010 | |||||||
| 1000 | 4500 | 7.5 | 2.5 | 13138 | |||||||
| 1200 | 4200 | 7 | 3 | 14515 | |||||||
| 1400 | 3900 | 6.5 | 3.5 | 16143 | |||||||
| 1600 | 3600 | 6 | 4 | 18020 | |||||||
| 1800 | 3300 | 5.5 | 4.5 | 20148 | |||||||
| 2000 | 3000 | 5 | 5 | 22525 | |||||||
| 2200 | 2700 | 4.5 | 5.5 | 25153 | |||||||
| 2400 | 2400 | 4 | 6 | 28030 | |||||||
| 2600 | 2100 | 3.5 | 6.5 | 31158 | |||||||
| 2800 | 1800 | 3 | 7 | 34535 | |||||||
| 3000 | 1500 | 2.5 | 7.5 | 38163 | |||||||
| 3200 | 1200 | 2 | 8 | 42040 | |||||||
| 3400 | 900 | 1.5 | 8.5 | 46168 | |||||||
| 3600 | 600 | 1 | 9 | 50545 | |||||||
| 3800 | 300 | 0.5 | 9.5 | 55173 | |||||||
| 4000 | 0 | 0 | 10 | 60050 |
Microeconomics Theory Assignment Fall 2020
