ECON 4350 Midterm: ECON 4350 UGA 4350.hexam2.07
Document Summary
Spring 2007: assume that there are ve wheat farmers in a perfectly competitive market who are located on a rail line which runs to a grain mill. Assume that the competitive market price is high enough to just cover the production and transportation costs of farmer number 5, who is located the farthest from the mill. Assume also that each farmer has the same marginal cost of production: which farmer earns no rents, which farmer earns the greatest rents, first-degree price discrimination: complete a diagram indicating rst-degree price discrimination. I have drawn the demand curve and mc: indicate the mr curve and the total amount sold, label the area of dead-weight loss as dwl and consumer surplus as cs. 1: third-degree price discrimination, finish the following diagram illustrating third-degree price discrimination with constant marginal cost. I have drawn in d1, d2, and m c. draw in m r1 and m r2.
