Practice Problem 1. The following table reports the marginal product of the first 16 workers a tomato grower could hire, that is, it tells us how many extra tomatoes each worker could grow. The tomato grower has monthly fixed costs of $50. The monthly wage of each worker is also $50. The tomato grower participates in a perfectly competitive market where there are currently 1000 identical growers. They sell boxes of tomatoes which contain 1500 tomatoes each and currently the market price of these boxes is $200.
Worker
MP
Worker
MP
1
400
9
500
2
500
10
400
3
600
11
350
4
700
12
300
5
800
13
275
6
800
14
250
7
700
15
225
8
600
16
100
Task 1.1: Use the information provided to fill the following table.
# workers needed
TFC
TVC
TC
MC
MR
0
------------------------------------
----------------------------------------
1
2
3
4
5
Practice Problem 1. The following table reports the marginal product of the first 16 workers a tomato grower could hire, that is, it tells us how many extra tomatoes each worker could grow. The tomato grower has monthly fixed costs of $50. The monthly wage of each worker is also $50. The tomato grower participates in a perfectly competitive market where there are currently 1000 identical growers. They sell boxes of tomatoes which contain 1500 tomatoes each and currently the market price of these boxes is $200.
Worker
MP
Worker
MP
1
400
9
500
2
500
10
400
3
600
11
350
4
700
12
300
5
800
13
275
6
800
14
250
7
700
15
225
8
600
16
100
Task 1.1: Use the information provided to fill the following table.
# workers needed
TFC
TVC
TC
MC
MR
0
------------------------------------
----------------------------------------
1
2
3
4
5
Related textbook solutions
Related questions
Alex Lopez & Sons, Inc. A hydroponic farm with eight greenhouses for producing tomatoes in a perfectly competitive
industry competing with other greenhouse growers and field producers in the U.S.
and Mexico. (In the short run).
Part I. Compute the values for the blank cells.
|
Q * Green- houses/ lbs. of Tomatoes |
Expected Wholesale Market Price/ Per lb. |
TR |
MR Per/lb. |
FC |
VC
|
TC |
$ Profit or loss |
AVC Per/lb. |
ATC Per/lb. |
MC Per/lb. |
|
0/0 |
$ .80 |
$ 0 |
||||||||
|
1/ 25,000 |
$. 80 |
15,000 |
$ 37,000 |
|||||||
|
2/ 50,000 |
$ .80 |
25,000 |
||||||||
|
3/ 75,000 |
$ .80 |
27,000 |
||||||||
|
4/ 100,000 |
$ .80 |
30,000 |
||||||||
|
5/ 125,000 |
$ .80 |
$ 57,000 |
||||||||
|
6/ 150,000 |
$ .80 |
48,000 |
||||||||
|
7/ 175,000 |
$ .80 |
66,000 |
||||||||
|
8/ 200,000 |
$ .80 |
99,000 |
* Experience indicates that their yield is 25,000 lbs. of tomatoes per greenhouse. Therefore, for all per lb. computations, use thousands for Q
in the formulas, e.g. 25,000, 50,000, 75,000 etc. lbs. - instead of 1, 2, 3 etc. greenhouses.
