1. What price do you think each manufacturing facility will get?Why?Defend with economic principles.
2. What kind of economic profits should each firm expect to realize?Why?
3. If you were one of these firms, what might your course of action going forward be?

Relevant production data: Corn Corn Dry Wet Milling Milling (bushel) (bushel) Market price, dollars 2.16 2.16 Ethanol byproduct prices: DDGS $/ton 92.08 Corn gluten feed, $/ton 66.30 Corn gluten meal, $/ton 269.00 Corn oil, cents/lb 26.00 Starch (corn) / sucrose, % 72 72 Gallons of ethanol 2.75 2.65 Net feedstock cost, $/gal 0.53 0.40Dry Mill Wet mill Yield 2.75 2.65 gallon / bushel of corn capital 5 1.80 S 2.50 per gallon of nameplate capacity S/Gallon @ MES Corn 0.53 0.40 energy 0.19 0.20 chemicals (incl. water) 0.14 0.21 Labor 0.19 0.22 Total 5 1.05 S 1.03 Scale 50 - 100 100 - 425 Million Gallons per Year Approx MES 50 125 Million Gallons per Year $1.10 $ / gallon Long Run Average Cost Curves Dry Mill - - . Wet Mill w/co-products 105 - Wet Mill NO co-products 120 135 150 165 180 195Appendix 1: list of ethanol companies 123 companies 100.00% COMPANY % capacity POET Biorefining Total 10.76% ADM Total 10.16% Green Plains Inc. Total 9.27% Valero Renewable Fuels Total 8.80% Flint Hills Resources, LLC Total 5.28% Pacific Ethanol, Inc. Total 3.80% The Andersons Total 2.58% Cargill, Inc. Total 2.26% Marquis Energy, LLC Total 2.26% Guardian Total 1.86% White Energy Total 1.85% CHS Inc. Total 1.62% Glacial Lakes Energy, LLC Total 1.38% Tbaraldson Ethanol Total 0.96% Louis Dreyfus Commodities Total 0.91% Homeland Energy Solutions, LLC Total 0.88% Siouxland Ethanol Total 0.88% Little Sioux Corn Processors, LLC Total 0.85% MuGen Energy, LLC Total 0.82% Southwest lowa Renewable Energy, LLC Total 0.82% Absolute Energy, LLC Total 0.79% Al-Corn Clean Fuel, LLC Total 0.75% Chief Ethanol Fuels Inc. Total 0.75% One Earth Energy Total 0.75% Golden Grain Energy, LLC Total 0.72% Ackalon Energy, LLC Total 0.69% Big River Resources Galva LLC Total 0.69% Big River United Energy, LLC Total 0.69% Pennsylvania Grain Processing LLC Total 0.69% Big River Resources West Burlington, LLC Total 0.66% Tate & Lyle Total 0.66% South Bend Ethanol, LLC Total 0.64% Cardinal Ethanol Total 0.63% Heartland Corn Products Total 0.63% Badger State Ethanol, LLC Total 0.57% KAAPA Ethanol Ravenna, LLC Total 0.57% ABE South Dakota, LLC Total 0.53% Sunoco Ethanol Total 0.53%E Energy Adams, LLC Total 0.50% KAAPA Ethanol, LLC Total 0.50% Husker Ag, LLC Total 0.48% Blue Flint Ethanol Total 0.41% Bushmills Ethanol Inc. Total 0.41% Dakota Spirit AsEnergy LLC Total 0.41% Fox River Valley Ethanol, LLC Total 0.41% Western New York Energy, LLC Total 0.41% Heron Lake BigEnergy, LLC Total 0.40% Granite Falls Energy, LLC Total 0.39% Bemetis Total 0.38% Corn, LP Total 0.38% Kansas Ethanol, LLC Total 0.38% Lincolnland Agri-Energy, LLC Total 0.38% Redfield Energy Total 0.38% Show Me Ethanol, LLC Total 0.38% Highwater Ethanol Total 0.37% United Wisconsin Grain Producers, LLC Total 0.36% Big River Resources Boyceville, LLC Total 0.36% Bonanza BigEnergy, LLC Total 0.35% Calgren Renewable Fuels LLC Total 0.35% Carbon Green Bioenergy Total 0.35% Central Indiana Ethanol (CIE) Total 0.35% Lincolnway Energy, LLC Total 0.35% Pratt Energy Total 0.35% Center Ethanol Company, LLC Total 0.34% Ergon Biofuels, LLC Total 0.34% Adkins Energy, LLC Total 0.33% Bridgeport Ethanol Total 0.31% Chippewa Valley Ethanol Co. Total 0.31% Didion Ethanol, LLC Total 0.31% Iroquois Bio-Energy Company, LLC Total 0.31% Lifeline Foods, LLC Total 0.31% Marysville Ethanol, LLC Total 0.31% Mid-Missouri Energy, Inc. Total 0.31% Pinal Energy, LLC Total 0.31% Plymouth Energy, LLC Total 0.31% Red Trail Energy, LLC Total 0.31% Three Rivers Energy, LLC Total 0.31% United Ethanol, LLC Total 0.31% Western Plains Energy Total 0.31% ACE Ethanol, LLC Total 0.30% Dakota Ethanol, LLC Total 0.30%Mid-America BioEnergy, LLC Total 0.29% Ingredion Inc. Total 0.28% Nebraska Corn Processing Total 0.28% East Kansas Agri-Energy, LLC Total 0.26% Sterling Ethanol, LLC Total 0.26% Corn Plus, LLP Total 0.25% Diamond Ethanol Total 0.25% Front Range Energy, LLC Total 0.25% Grain Processing Corp. Total 0.25% Prairie Horizon Agri-Energy, LLC Total 0.25% Trenton Agri Products, LLC Total 0.25% Yuma Ethanol Total 0.25% Pine Lake Corn Processors, LLC Total 0.24% Quad County Corn Processors Total 0.24% Commonwealth Agri-Energy, LLC Total 0.21% Red River BioRefinery, LLC Total 0.16% DENCO II, LLC Total 0.15% Gevo Total 0.14% Reeve Agri-Energy Total 0.08% Butamax Advanced Biofuels LLC Total 0.06% Parallel Products Total 0.04% Golden Triangle Energy, LLC Total 0.03% Merrick & Company Total 0.03% Maumee Express, Inc. (MXI) Total 0.03% Land O' Lakes Total 0.02% ESE Alcohol Inc. Total 0.01% Summit Natural Energy Total 0.01%