Question

Every farmer in the perfectly competitive market for almonds have the same long run cost function, where q is pounds of almonds: C = 109 - 2q2 +(1/6)q3 (A) What is the market price for almonds per pound? (B) What is the number of farms in the market if demand is 10,000 pounds of almonds? (C) If there is a shortage of bees to pollinate the almond trees, what will happen to the supply of almonds, the number of firms and firm profits in the short run? (just explain – no specific numbers needed)

Answer 1

a) C= 109-292 +9816 LR market price is min of me AC = C19 = 10-29 + 9216 dAc/dq - 2 + 2016 =o. 9/3=2 9-6 P= Min Ac= 10-8(6) + (6)2/6 10-12 + 6 = $4 Ang b) demand Qd = 10,000 80 Individual firm period n = 6. 80 Number of farms = 10,000 = 1666.67 ~ 1666 faome Ang C) Supply will fall, as Short Run, Number of fioms stay same, Prices rises, profits Rise."