Assume there are three farms in a county growing corn in a perfectly competitive market. The overall global market supply of corn is given by QS=P. The demand function equals QD=100-P. The marginal cost functions for the farms are given by MC1=48+Q, MC2=46+Q and MC3=42+Q. Assume there is no fixed cost of production.
a) Calculate the overall market equilibrium quantity and the corresponding market clearing price.
b) How much corn does each farm produce?
c) What is each firm’s annual profit?
d) Assuming a discount rate of 4% and a profit growth rate of 1.5%, what is the land of each firm worth?