Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The table for question 8 is above for convenience. Please have the graph filled out in a document it makes it so much easier to

The table for question 8 is above for convenience. Please have the graph filled out in a document it makes it so much easier to read

image text in transcribed
8. (10 points) Suppose the table below gives the costs for Greenthumb's avocado farm. Note: we will be using this cost data for several questions so be careful to find the correct the values. Q TC VC ATC AVC MC 15 25 10 25 10 10 2 30 15 15 7.5 5 40 25 13.33 8.33 10 TC VC ATC AVC MC 4 55 40 13.75 10 15 5 75 60 15 12 20 6 100 85 16.67 14.17 25 7 130 115 18.57 16.43 30 10. (24 points) Now suppose that a disease wipes out avocado producers except Greenthumb, so that they are a monopoly. Suppose further that the market demand for avocadoes is given below (use the cost data from question 8) Price Quantity Demand TR MR 55 0 50 1 45 2 40 3 35 4 30 5 25 6 20 7 a. Calculate total revenue at each quantity. b. Calculate marginal revenue at each quantity. c. Suppose Greenthumb charges a single price, what is their profit maximizing quantity and how much profit do they earn at that quantity? d. With Greenthumb operating as a single-price monopoly, is this market efficient? Briefly explain your answer. e. Now suppose Greenthumb can perfectly price discriminate - how much will they produce and how much profit do they earn? Is the market efficient when Greenthumb is a perfect price discriminator

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_2

Step: 3

blur-text-image_3

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

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

More Books

Students also viewed these Economics questions

Question

1. Empirical or factual information,

Answered: 1 week ago

Question

1. To take in the necessary information,

Answered: 1 week ago