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Name___________________________
Pledge (sign)________________________
“I did not copy another student’s answers”
Economics 4020 – Dr. Rupp
Homework #3– Perfect Competition
Due: Sept 21st
Discussion question #1 – Draw two graphs side-by-side that show the market equilibrium price for soy beans as $3
per pound. The second graph is for Sally the soy bean farmer whose profit maximizing output is 80 pounds of
soybeans. Show on your graph Sally making a profit of $140 at the market price of $3. Label all curves you draw and
clearly indicate the profit region.
P U.S. Soy bean Market P Sally “the soy bean farmer”
__________________________________________Q _______________________________________Q
Discussion question #2
? Is the above scenario a short-run or long-run equilibrium?
? If it is not a long-run equilibrium, tell me how you know this?
? What do you expect to happen in the long-run?
? What effect will these long run changes have on either the supply or demand curve in the U.S. Soy bean
market?
? What effect will these long run soy bean market changes have on Sally the soy bean farmer?
? What happens in the long run to soy bean prices?
Name___________________________
? What happens in the long run to the quantity of soy beans produced in the market?
? What happens in the long run to the quantity of soy beans produced by Sally?
Label the initial equilibrium points “A” in both graphs below…label the new long-run equilibrium points “B” on
your graph below.
P U.S. Soy bean Market P Sally “the soy bean farmer”
__________________________________________Q _______________________________________Q Document Preview:

Name___________________________ Pledge (sign)________________________ “I did not copy another student’s answers” Economics 4020 – Dr. Rupp Homework #3– Perfect Competition stDue: Sept 21 Discussion question #1 – Draw two graphs side-by-side that show the market equilibrium price for soy beans as $3 per pound. The second graph is for Sally the soy bean farmer whose profit maximizing output is 80 pounds of soybeans. Show on your graph Sally making a profit of $140 at the market price of $3. Label all curves you draw and clearly indicate the profit region. P U.S. Soy bean Market P Sally “the soy bean farmer” __________________________________________Q _______________________________________Q Discussion question #2 ? Is the above scenario a short-run or long-run equilibrium? ? If it is not a long-run equilibrium, tell me how you know this? ? What do you expect to happen in the long-run? ? What effect will these long run changes have on either the supply or demand curve in the U.S. Soy bean market? ? What effect will these long run soy bean market changes have on Sally the soy bean farmer? ? What happens in the long run to soy bean prices?Name___________________________ ? What happens in the long run to the quantity of soy beans produced in the market? ? What happens in the long run to the quantity of soy beans produced by Sally? Label the initial equilibrium points “A” in both graphs below…label the new long-run equilibrium points “B” on your graph below. P U.S. Soy bean Market P Sally “the soy bean farmer” __________________________________________Q _______________________________________Q

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