Question
Sand with the crush strength that is desired for hydraulic fracturing exists in abundance in Western Wisconsin (WW), Eastern Minnesota (EM), and Northern Illinois (NI).
Sand with the "crush strength" that is desired for hydraulic fracturing exists in abundance in Western Wisconsin (WW), Eastern Minnesota (EM), and Northern Illinois (NI). Sand mined from these areas is referred to as Northern White Sand. It has spherical, roundness, and crush strength characteristics that are not found anywhere else in the world. The Northern White Sand (NWS) industry in the U.S. is a fragmented commodity industry consisting of many price-taking firms. The marginal cost of extracting & transporting (via railroad) a ton of sand depends on the location. The capacity of a region is determined by the transportation infrastructure
| Location | Marginal Cost ($/ton) | Annual Capacity for Region (tons) |
| WW | 100 | 300,000 |
| EM | 120 | 600,000 |
| NI | 200 | 400,000 |
- Construct the short run supply curve for the NWS industry
- If the market price is $185, how many thousand tons of NWS will be supplied?
- Find the market equilibrium conditions when the market demand is given by:
Q = 2,800,000 - 5000P (where P is in $ and Q is in tons)
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