Perfectly Competitive Industry Supply
Farm Fresh, Inc., supplies sweet peas to canners located throughout the Mississippi River Valley. Like some grain and commodity markets, the market for sweet peas is perfectly competitive. The company's total and marginal costs per ton are given by the following relations:
TC = $250,000 + $200Q + $0.02Q2:
MC = DTC/DQ = $200 + $0.04Q
A. Calculate the industry price necessary for the firm to supply 5,000, 10,000, and 15,000 tons of sweet peas.
B. Calculate the quantity supplied by Farm Fresh at industry prices of $200, $500, and $1,000 per ton.