Compute the values for the blank cells. Microeconomics
Part I. Compute the values for the blank cells.
Henry Korn & Sons, Inc. – A Perfectly Competitive Firm
| Q * (Fields) | Price Per Ton | TR | MR Per Ton | FC | VC
|
TC |
Profit or loss |
AFC Per Ton | AVC Per Ton | ATC Per Ton | MC Per Ton |
| 0 | $40.00 | $0 | 35,000 | $ 0 | 35,000 | ||||||
| 1 | $40.00 | $40 | 35,000 | 24,000 | $59,000 | ||||||
| 2 | $40.00 | $80 | 35,000 | 40,000 | 75,000 | ||||||
| 3 | $40.00 | 120 | 35,000 | 60,000 | 95,000 | ||||||
| 4 | $40.00 | 160 | 35,000 | 85,000 | 120,000 | ||||||
| 5 | $40.00 | 200 | 35,000 | 121,000 | $156,000 | ||||||
| 6 | $40.00 | 240 | 35,000 | 169,000 | 204,000 | ||||||
| 7 | $40.00 | 280 | 35,000 | 221,000 | 256,000 | ||||||
| 8 | $40.00 | 320 | 35,000 | 286,000 | 321,000 |
* Experience indicates that their yield is 1,000 tons per field. Therefore, for all per ton computations, use thousands for Q in the formulas, e.g. 1,000, 2,000 etc. tons, instead of 1,2 etc. fields.
Part II. On the grid at the right – PLOT the per ton: P, MR, AVC, ATC, and MC… (Use an EXCEL or similar program to graph and plot on a separate graph paper and STAPLE it to this assignment). Use titles on graph, axes, and variables.
Part III. Individual Writing Questions. Answer the following questions in a few well-written sentences.
1) How many fields should Henry & Sons plant this spring to maximize profits, and what determines this?
2) Should they try to get a price higher than $40 per ton to improve profits? Why, or why not?
3) Assume the price is $40 per ton, should they consider closing down? Why, or why not?
4) Explain which of the variables computed in the table and plotted on the graph represent the supply and demand curves for the Henry Korn & Sons Company.
5) Explain what the supply and demand curves indicate to the Henry Korn firm.
