Part VI: Perfect Competition

There are currently one thousand producers of soybeans, each with identical economic costs like those in diagram A below. (I changed the costs so that you can use a more stereotypical U-shaped curve.) The market demand for soybeans is shown in diagram B below.

IIIIII._.ll|IIIdIIIIII1|ll|II1IIIIII E. Market Supply and Demand for So neans {millions if soybeans per week] Each So been Producer A. Cost Situation for _||-i|+i|-iii-i1i (thousands of soybeans per week) A. Plot on diagram E the current market supply curve for soybeans and label this curve "5\". (Ask how much each producer will supply at the various prices, and gure how much the total supply from all thousand producers together will he at those prices. Note one million is a thousand thousand.) B. Place a dot at the minimum of the average total cost and the average variable cost. Remember that those points represent the minimum level and if we are not at those points the average cost "must\" be greater than the minimum. This is important later when you are askedto approximate prices. C. Shade in the appropriate prot (or lose) in diagram A; and calculate the total amount of economic prot or lose each typical soybean producer will make under theae conditions. Fill in the blanks beleaar to aid in your calculation. Price 0?) received by each Soybean producer 3 Quantity {0] produced by each Soybean producer: thousand Soybeans. Average total coat {ATE} for this quantity {approximate}: $ per Soybean: Total revenue for each Soybean producer: $ Total coat for each Soybean producer: $ Total prot for each Soybean producer: $ D. Based on your last answer, is the Soybean market in long-run equilibrium? 1Why or \"dry not? E.1i'hatiathe1ongmnequilihriumpriceinthiamarket? $ perSoybean How many Soybeans will each rm produce at this price? thouaand Soybeans per week. How many rrre will be in the market at this price