Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help me with part B of the questions PART A Wholesalers of roses (the firms that supply flower shops with roses for Valentine's Day)

please help me with part B of the questions

image text in transcribed
PART A Wholesalers of roses (the firms that supply flower shops with roses for Valentine's Day) sell roses in containers that hold 120 stems. In Australia, wholesalers operate in a perfectly competitive market. The table below is a cost schedule for one wholesaler - Valentine Roses Co.: Quantity Total cost [$] [containers per week] 30 1 40 2 52 3 66 82 5 100 6 120 7 142 8 166 a) Suppose the market price of roses is $15 per container. What is the profit- maximising quantity Valentine Roses Co will sell and what profit will it earn? Explain your answer. b) Draw the short run supply curve for Valentine Roses Co. Explain how you derived the supply curve. PART B Now assume that the cost schedule for Valentine Roses Co. as shown in Part A above is the one that the firm uses in the long run. a) In long run equilibrium, what would be the price per container of roses and what quantity of containers of roses will Valentine Roses Co sell? Explain how you arrived at this result. b) Suppose all other firms in the wholesale rose industry are identical to Valentine Roses Co. In long run equilibrium, how many firms will operate in the industry? 17 The market demand for roses is: Price per container 14 16 18 20 22 ($ Market demand 280 240 200 160 120 [containers per week]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

A Course In Environmental Economics

Authors: Daniel J Phaneuf, Till Requate

1st Edition

1316866815, 9781316866818

More Books

Students also viewed these Economics questions

Question

How are most students funded?

Answered: 1 week ago