Ill. Problems, Points A. Perfect Competition, 10 Points 1)How many bushels of wh
ID: 1129950 • Letter: I
Question
Ill. Problems, Points A. Perfect Competition, 10 Points 1)How many bushels of wheat will the typical wheat producer supply? Explain. What are the typical producer's total costs, total revenues, and profits? Explain. What will happen to the price of wheat and the profits of the typical wheat farmer in the long run? Explain. MC ATC Price of Supply of Wheat Wheat $19 $17 $15 $13 $19 $17 $15 $13 $11 $11 Demand for Wheat 123456 789 10 11 12 Quantity of Whear Milions of Bushe 200 300 400 500 (Thousands Bushaw Typical Wheat Farmer Market for WheatExplanation / Answer
The market structure represents that of perfect competition. From the demand supply diagram we can find the price level prevailing in the market. In the market the equilibrium price is $15 where quantity supplied =Quantity demanded.
III)
Total Revenue = P*Q = 15*9 = $135
Profits = TR-TC = 135 -135 = 0
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