Consider the market for wheat, which is approximately perfectly competitive. The average total cost of the typical wheat farm is ATCC) 100Q, ts average variable cost is AVC() Q, and its marginal cost is MC(Q) 2Q. Suppose that there are currently 500 active wheat farms in the market, and the market demand curve is given by PD0
a.) What is the short-run market supply curve in this market? 1000
b.) Compute the short-run competitive equilibrium in this market.
c.) Compute the profit or loss of the individual wheat farms in the short-run competitive equilibrium.
d.) How many wheat farms will operate in this market in the long-run?