Economc HW

Quantitative Literacy Assignment NAME_______________________________________ Banner ID____________________________________ 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 1000 $40.00 24,000 $59,000 2000 $40.00 40,000 3000 $40.00 60,000 4000 $40.00 85,000 5000 $40.00 $156,000 6000 $40.00 169,000 7000 $40.00 221,000 8000 $40.00 286,000

Part II. On the grid at the right – PLOT the per ton: P, MR, AVC, ATC, and MC.

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? 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. Why are they the supply and demand curves?