Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The market for organic tomato is competitive. Table 1 below presents the price and demand schedule for tomato in the market. Table 1. Price and

The market for organic tomato is competitive. Table 1 below presents the price and demand schedule for tomato in the market.

Table 1. Price and demand for organic tomatoes

Price of organic tomato (per kg)Quantity demanded
$62000
$81600
$101000
$12700
$14420
$16100
$180


Each organic tomato farmer in the market has a cost schedule which is shown in Table 2 below.

Table 2. Quantity of tomatoes and marginal cost

Quantity of organic tomatoesMarginal cost
00
206
3013
4010
5016
6018

Assume the fixed cost is $200.

Assume that the price of organic tomatoes is $10 per kg. How many organic tomatoes should each farmer sell? How many farmers are there? How much profit does each farmer gain?

Fill in the blanks below.

1. Each farmer should sell ………… organic tomatoes.

2. There are…………. farmers in the market. (Hint: Round down. If your calculator shows 5.5, type 5)

3. The profit for each farmer is $ ……………. (Hint: Make sure put a negative sign or "-" if it is a loss.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

1 Each farmer should sell organic tomatoes Given that the price of organic tomatoes is 10 per kg farmers will sell where their marginal cost MC equals ... blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

1119563097, 9781119563099

Students also viewed these Economics questions