How many fields should henry and sons plant this spring to


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

 

35,000

$        0

35,000

 

 

 

 

 

     1

$40.00

$40

 

35,000

    24,000

$59,000

 

 

 

 

 

     2

$40.00

$80

 

35,000

    40,000

75,000

 

 

 

 

 

     3

$40.00

120

 

35,000

    60,000

95,000

 

 

 

 

 

     4

$40.00

160

 

35,000

    85,000

120,000

 

 

 

 

 

     5

$40.00

200

 

35,000

  121,000

$156,000

 

 

 

 

 

     6

$40.00

240

 

35,000

  169,000

204,000

 

 

 

 

 

     7

$40.00

280

 

35,000

  221,000

256,000

 

 

 

 

 

     8

$40.00

320

 

35,000

  286,000

321,000

 

 

 

 

 

* Experience indicates that their yield is 1,000 tons per field. Therefore, for all per ton computations, use thousands for Q in the formulas, e.g. 1,000, 2,000 etc. tons, instead of 1,2 etc. fields.

Part II.  On the grid at the right - PLOT the per ton: P, MR, AVC, ATC, and MC...   (Use an EXCEL or similar program to graph and plot on a separate graph paper and STAPLE it to this assignment).  Use titles on graph, axes, and variables.

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, or why not?

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.

5)  Explain what the supply and demand curves indicate to the Henry Korn firm.

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