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Profit for a perfectly competitive firm can be expressed as
26.
Farmer brown grows a peaches. The average total cost and
marginal cost of growing peaches for an individual farmer are
illustrates in the graph to right
Assume the market for peaches is perfectly competitive and that
the market price is $38 per box. Also assume that farmer Brown
is producing the amount of peaches that maximizes profits.
27.
Lauren grows grapes. Her average variable cost (AVC),
average total cost (ATC), and marginal cost (MC) of production
are illustrated in fig to the right
Assume the market for grapes is perfectly competitive and the
market price is $4.00 per crate
Characterize Lauren’s economic profits. Assume she produces
such that she maximizes profits in short run
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ECON 545 Week 3 Course Project 1 Microeconomic Analysis
(Situation A)
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