Imagine you are the owner of a farm that grows and sells kilograms of corn, which can be modeled after a perfect competition market. You know that there are 1,000,000 consumers in the market for corn and that they each have a demand function for kilograms of corn (x) below. You also know that you are one of 1,000 farms that each have the supply function for kilograms of corn (q) per hour below: x = 10 – 0.25 Px + 3 I + 4 Py q = 40 + 0.5 Px – 4 PL + 400 K

a. What is the Market Demand function?

b. What is the Market Supply function?

c. What is the Equilibrium Market Price for a kilogram of corn? *(Assume that PL = 10, K = 50, Py = 50, and I = 1,000)

d. What is the equilibrium quantity of kilograms of corn for the market? What is the profit maximizing (quantity) kilograms of corn for a firm to sell?

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a Demand function x 10 025 Px 31 4 Py Market demand ia horizontal summation of all demadn function 3... View the full answer