Determine the equilibrium price for product

Assignment Help Macroeconomics
Reference no: EM1369240

The table listed below demonstrate the quantities of product X that a producer can produce in one growing season on a 1 acre farm using different amounts of labor. The dollar values assume that the land rents for $100 and labor's wage is $300 per growing season.

Land Labor Total Output Marginal Product Total Variable Cost Total Cost Marginal Cost Average Variable Cost Average Total Cost
1 0 0 0 100
1 1 6 6 300 400 50.00 50.00 66.67
1 2 13 7 600 700 42.86 46.15 53.85
1 3 21 8 900 1000 37.50 42.86 47.62
1 4 30 9 1200 1300 33.33 40.00 43.33
1 5 38 8 1500 1600 37.50 39.47 42.11
1 6 45 7 1800 1900 42.86 40.00 42.22
1 7 51 6 2100 2200 50.00 41.18 43.14
1 8 56 5 2400 2500 60.00 42.86 44.64
1 9 60 4 2700 2800 75.00 45.00 46.67
1 10 63 3 3000 3100 100.00 47.62 49.21
1 11 65 2 3300 3400 150.00 50.77 52.31

This next table is a marginal value table for one individual for product X. MV is measured in dollars. Use these two tables to answer the last question.

Quantity of X per growing season Marginal Value
1 150
2 137
3 100
4 92
5 84
6 75
7 60
8 50
9 43
10 37

Suppose that there is a market for X that consists of 10 identical producers, each with the same production costs as shown in the table above. In this market there are also 100 consumers, each with the marginal value as shown in the mv table above. Assume that all transaction costs are zero and traders will trade when indifferent:
a. What will be the equilibrium price for product X?
b. How many units of X will each producer produce?
c. How much profit will each producer earn?
d. How many workers will each producer employ?
e. If the government thought that the price you determined in 5a was "unfair" and passed a law saying the price could not be greater than $43,
would there be a shortage or a surplus in this market?

 

Reference no: EM1369240

Questions Cloud

What are the tensions in cables : A diving board of length 3{rm m} is supported at a point 1 {rm m} from the end, and a diver weighing 550 {rm N} stands at the free end. The diving board is of uniform cross section and weighs 295 {rm N}. Find out the magnitude of the force at the ..
How to express correctness properties in ltl : Express the given correctness properties in LTL. Defne propositions/variables to model the events mentioned in the question. If a parent process calls the blocking waitpid() system call then it is blocked until child process terminates.
How much does new york job have to pay : How much does New York job have to pay in order for two salaries to represent about same purchasing power. When box office receipts are corrected for inflation, No.
Find the speed of the arrow as it leaves bow : A humanitarian aid package is dropped from a plane flying horizontally 500m above the ground with a speed 100m/s. What is the speed of the package at time of impact? (Calculate the total speed, not a horizontal or vertical projection.)
Determine the equilibrium price for product : The table listed below demonstrate the quantities of product X that a producer can produce in one growing season on a 1 acre farm using different amounts of labor.
Explain activities of business modeling discipline : Activities of business modeling discipline study the information needs of user, the ways in which those requirements are being.
What is the value of refractive index : A concave mirror is of hemisphjerical shape with radius 40cm. A thin layer of unknown transparent liquid is poured into mirror. The mirror liquid forms a real image and another real image is formed by the mirror alone.
How did this limit potential for monetary policy to help all : During Great Depression, businesspeople in United States were very pessimistic about future of economic growth and reluctant to increase investment spending even when interest rates fell. How did this limit potential for monetary policy to help al..
How much work is completed on the gas in process : A sample of gas (? = 1.5) is taken through an adiabatic process in which the volume is compressed form 1600 cc to 400 cc. If the initial pressure is 150 KPa, what is the final pressure? How much work is completed on the gas in process.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Elucidate the excess of cost over the marginal price

Elucidate the excess of cost over the marginal price at the profit maximizing price-quantity combination?

  Lucidate the three trade-offs within a specific good service

Microeconomics is considered to be the study of scarce resources. Elucidate the three trade-offs within a specific good/service within your local area.

  Assume that your shareholders own only us stocks

Assume that your shareholders own only U.S. stocks. Would you expect an overseas investment to have above- or below-average risk for them.

  Explain how could government make a choice

Explain how could government make a choice among two health effects.

  Obtaining higher average payoff

Assume the 3 firms compete for market share over an infinite time horizon.  Each firm takes the present value of 1 dollar tomorrow to be X dollars today, where 0

  Estimate before-tax charcoal price

Give the before-tax charcoal price and quantity exchanged. Give the after-tax charcoal price to buyers, the quantity exchanged, and total tax revenues.

  Explain how should she reallocate her expenditures

Explain how should she reallocate her expenditures among the two goods.

  Provide that the risk free interest rate premium on market

Barramundi Inc. stock is currently selling at $40 per share (its equilibrium price) provide that the risk free interest rate is 8% and the equilibrium risk premium on the market portfolio is 6%.

  Elucidate what effect on international trade

One of the major political developments of the past several decades is the growing size and economic/monetary integration of the European Union. Elucidate what effect do you think this will have on international trade between countries.

  Indurtry can pay only one of the six salary

If the indurtry can pay only one of the six salary levels shown, which should it choose? How many workers will it employ?

  Compute the total fixed costs and total variable costs

Compute the total fixed costs, total variable costs, average fixed costs.

  Analysis of price-quantity and diminishing returns

At the management luncheon, two managers were overheard arguing about the following statement: "A manager should never hire another worker if the new person causes diminishing returns". Is this statement correct? If so, why? If not, explain why no..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd