Discussion question #1 – Draw two graphs side-by-side that show the market equilibrium price for soy...

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.
1. Is the above scenario a short-run or long-run equilibrium?
2. If it is not a long-run equilibrium, tell me how you know this?
3. What do you expect to happen in the long-run?
4. What effect will these long run changes have on either the supply or demand curve in the U.S. Soy bean market?
5. What effect will these long run soy bean market changes have on Sally the soy bean farmer?
6. What happens in the long run to soy bean prices?
7. What happens in the long run to the quantity of soy beans produced in the market?
8. What happens in the long run to the quantity of soy beans produced by Sally?

draw 2 graphs below Label the initial equilibrium points “A” in both graphs below…label the new long-run equilibrium points “B” on your graph below.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Draw two graphs side-by-side that show the market equilibrium price for soy beans as $3 per...

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. 1. What effect will these long run changes have on either the supply or demand curve in...

Question 1 In the space below you will draw two graphs, side by side. The graph...

Question 1 In the space below you will draw two graphs, side by side. The graph on the left will show the production possibilities frontier (PPF) for the U.S. and the graph on the right will show the PPF for Brazil. Assume that each of these countries produces only two goods: Jets and helicopters. For both countries you will show the quantity of jets produced on the vertical axis and the quantity of helicopters produced on the horizontal axis. Draw...

In the space below you will draw two graphs, side by side. The graph on the...

In the space below you will draw two graphs, side by side. The graph on the left will show the production possibilities frontier (PPF) for the U.S. and the graph on the right will show the PPF for Brazil. Assume that each of these countries produces only two goods: Jets and helicopters. For both countries you will show the quantity of jets produced on the vertical axis and the quantity of helicopters produced on the horizontal axis. Draw a straight-line...

In the space below you will again draw two graphs, side by side. The graph on...

In the space below you will again draw two graphs, side by side. The graph on the left will show the production possibilities frontier (PPF) for Country A and the graph on the right will show the PPF for Country B. Assume that each of these countries produces only two goods: Fish and broccoli. For both countries you will show the quantity (in pounds) of fish produced on the vertical axis and the quantity (pounds) of broccoli produced on the...

Draw three graphs that show the following: How market price is determined in the long run...

Draw three graphs that show the following: How market price is determined in the long run for a perfectly competitive market. How this market price determines the quantity produced in a perfectly competitive market in the long run (be precise with what other curves are intersecting at this quantity). The market price and quantity produced in a monopoly. How do the price and quantity compare to a perfectly competitive market?

Draw side-by-side diagrams of the money market and FX market inthe short run. Show what...

Draw side-by-side diagrams of the money market and FX market in the short run. Show what happens to the home interest rate and the exchange rate when the real GDP of the home country decreases while the nominal money supply is unchanged, all else equal.

2) 1. A) Draw demand and supply curves for the market for milk. Show the equilibrium...

2) 1. A) Draw demand and supply curves for the market for milk. Show the equilibrium price and quantity combination (where the curves intersect). B) Graphically illustrate and explain the impact of a government law that sets the price of milk above the price given by the intersection of the curves. Be sure to identify the groups that are helped by the law and those that are hurt. Explain how the law impacts these groups. C) Explain the unintended consequences...

1. Draw two graphs of a theoretical situation of the vaccine market during these times of...

1. Draw two graphs of a theoretical situation of the vaccine market during these times of the pandemic of COVID-19. Draw these two graphs, short and long term costs for the initial vaccine firm/firms. Draw the graphs to show the firm's cost curves in the short-run, and the long-run (envelope) showing where these initial vaccine producers will operate (i.e. the efficient scale). Firm's cost curves will dictate supply of this firm/or firms.

1. Draw two separate graphs that show the “do nothing” or classical approach and the active...

1. Draw two separate graphs that show the “do nothing” or classical approach and the active monetary policy or Keynesian approach in the case of an aggregate demand shock in the AS-AD framework. Briefly explain the steps involved in the Fed’s monetary response.

Question 1 a. Draw a diagram to show the long run equilibrium condition of the perfectly...

Question 1 a. Draw a diagram to show the long run equilibrium condition of the perfectly competitive firm [5 marks] b. Explain three reasons why monopolies arise [3 marks] c. When does a perfectly competitive firm temporarily shut down production? When does it leave the industry all together? [4 marks] d. What obstacles might a group of oligopolists encounter in forming a cartel? [4 marks]

Subjects