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18 Farmer Jones' marginal cost of producing tomatoes is $5 per bushel. A consumer is willing to pay at most $9 for the bushel. The market price of a bushel is $6 and Farmer Jones sells his bushel to that consumer for $6. On this bushel, Farmer Jones will eam a producer surplus equal to the consumer will gain a consumer surplus of A. $3: $0 B. $1; $0 C. $0; $9 D. $6; $9 E. $1; $3

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Related questions

Price per Bushel Quantity Demanded(bushels) Quantity Supplied(bushels)
$3 30,000 0
$6 26,000 4000
$9 22,000 9000
$12 18,000 12,000
$15 15,000 15,000
$18 12,000 22,000
$21 8000 28,000
$24 4000 36,000

The table above contains information about the corn market. Use the table to answer the following questions.

a. What are the equilibrium price and quantity of corn?

b. Suppose the prevailing price is $9 per bushel. Is there a shortage or a surplus in the market?

c. What is the quantity of the shortage or surplus?

d. How many bushels will be sold if the market price is $9 per bushel?

e. If the market price is $9 per bushel, what must happen to restore equilibrium in the market?

f. At what price will suppliers be able to sell 22,000 bushels of corn?

g. Suppose the market price is $21 per bushel. Is there a shortage or a surplus in the market?

h. What is the quantity of the shortage or surplus?

i. How many bushels will be sold if the market price is $21 per bushel?

j. If the market price is $21 per bushel, what must happen to restore equilibrium in the market?

Briefly answer each question based on Table 1-2.
Table 1-2.
Price per bushel Quantity Demanded (bushels) Quantity Supplied(bushels)
$2 40,000 0
4 36,000 4,000
6 30,000 8,000
8 24,000 16,000
10 20,000 20,000
12 18,000 28,000
14 12,000 36,000
16 6,000 40,000

a. What is the equilibrium price and quantity of sorghum?
b. Suppose the prevailing price is $6 per bushel. Is there ashortage or a surplus in the
market?
c. What is the quantity of the shortage or surplus?
d. How many bushels will be sold if the market price is $6 perbushel?
e. If the market price is $6 per bushel, what must happen to restoreequilibrium in the
market?
f. At what price will suppliers be able to sell 36,000 bushels ofsorghum?
g. Suppose the market price is $14 per bushel. Is there a shortageor a surplus in the
market?
h.What is the quantity of the shortage or surplus?
i. How many bushels will be sold if the market price is $14 per bushel?
j. If the market price is $14 per bushel, what must happen torestore equilibrium in the market?

You are a produce grocer who sells two products: apples and bananas (you sell them in bushels, but we’ll just consider a bushel to be one unit of fruit). Each costs you $1 per bushel wholesale, which is your only cost. You can prevent resale among your customers, of which there are three, each with unit inelastic demand. Consumer 1 has a willingness to pay of $2 per apple (bushel) and $8 per banana (bushel). For Consumer 2, the willingness to pay is $4 for apples and $6 for bananas. Consumer 3 would pay up to $9 for apples but only $1 for bananas.

A. Suppose you price apples and bananas separately. What is the profit-maximizing price for each?

B. What is the profit-maximizing price if you sell the two fruit as a pure bundle?

C. What leads to higher profits – selling separately or offering a pure bundle? Explain how this answer relates to the correlation in consumers’ willingness to pay across apples and bananas.

D. Can you do better by mixed bundling? Explain why or why not?

E. Does your answer to part (d) change if your production cost is $3 per unit instead?

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