In the perfectly competitive market for orange juice concentrate the current market price is $2.19 per gallon.
1. A firm will maximize profits when its Marginal Costs per gallon are $__
2. Favorable conditions produce a record high harvest yield. We would expect the short-term market price per gallon to ___.
3. An unexpected deep freeze lowers the harvest yield. We would expect the short-term market price per gallon to ___.
4. Following such a freeze, in the short term, what should an individual firm do regarding its Marginal Costs to maximize its profits?
5. Labor costs go up, but market price stays at $2.19 per gallon. What will the firm need to do relative to the size of its workforce in order to maximize its profits?