Dear Totur please help me with letter h. Here is my work

The first two rows in the table below represent the market demand schedule for bushels of tomatoes. The last four rows provide data on a tomato farm's average and marginal costs.

Market

Price P

24

20

16

12

8

($/bushel)

Demand

Quantity

Schedule

3,000

4,000

5,000

6,000

7,000

(bushels)

Farm's

Farm's

1

2

3

4

5

Average

Output

and

MC ($)

11.00

11.13

12.00

13.63

16.00

Marginal

ATC ($)

13.50

12.25

12.00

12.19

12.70

Costs

AVC ($)

11.25

11.13

11.25

11.63

12.25

(a)What is this farm's minimum average variable cost? (1pts)

Answer:minimum AVC is $11.13.

(b)Below what market price will this farm shut down? Explain! (6pts)

Answer:

$11.13. This is the shutdown point where P=Minimum AVC. Below the price level of $11.13, the firm will shutdown.

(c)Assuming there are 1,000 farms in the market whose costs are identical to the farm shown above, complete the table below to show the quantity of bushels of tomato supplied by the market at each given price (so the table will show the market supply of bushels of tomatoes). Hint: Each farm's supply curve is its marginal cost curve above the shutdown price, and each farm will supply the quantity at which P = MC. (8pts)

Price (MC)

Quantity Supplied by the Market (1,000

farms)

$11.132*1000=2,000

$12.003*1000=3,000

$13.634*1000=4,000

$16.005*1000=5,000

(d)In the space below, you will sketch two graphs side by side. On the LEFT graph, sketch the market demand and market supply for bushels of tomatoes. On the RIGHT graph, sketch the MC and ATC for the farm whose costs are shown in first table above (the first table you encountered in Question 3). (14pts)

Using a separate sheet:

(e)With 1,000 farms, what is the equilibrium price and quantity? (6pts)

Answer:

The equilibrium price is $16, and quantity is 5,000. At this price quantity demanded equals quantity supplied.

(f)With 1,000 farms, will other farms enter or exit the market? Why? (6pts)

Answer:

in the short run firms will produce as P=>minimum AVC. Firms will enter the market.

(g)Calculate the long-run equilibrium price and quantity. (Hint: In long-run equilibrium, economic profit is zero and the market price is equal to the minimum ATC). (6pts)

Answer:

Long run equilibrium is when P=LRMC=Minimum ATC. This condition is met when P=$12. The equilibrium price will be $12, and quantity will be 3,000.

(h) Calculate the number of farms that will be in the market in long-run equilibrium. (4pts)