Questions

Q. The Type of Market Structure for Tomato Farmers Is: Perfect Competition

Explanation: The market for tomatoes described in the question fits the characteristics of a perfectly competitive market structure. These characteristics include:

1. Large Number of Sellers: With about 4000 tomato farmers, the number of sellers is sufficiently large, suggesting that no single farmer has significant market power to influence the market price.

2. Free Entry and Exit: The lack of barriers to entry means that new farmers can start tomato farming easily, and existing farmers can leave the industry if they wish.

3. Homogeneous Products: Tomatoes are described as being very similar in taste, texture, and appearance, indicating that they are homogeneous products. Buyers perceive them as identical regardless of the seller.

4. Price Takers: Given the large number of sellers and homogeneous nature of the product, individual farmers are price takers. They accept the market price for tomatoes as given and cannot influence it through their own actions.

5. Perfect Information: Buyers and sellers have full knowledge of prices and products in the market.

These features indicate that the tomato market operates under perfect competition.

Q. Fill in the blanks:

To complete the production and cost schedule for Firm A, let's calculate the missing values.

1. TR (Total Revenue) is calculated as Price × Quantity.
2. MR (Marginal Revenue) is the change in Total Revenue divided by the change in Quantity.
3. TC (Total Cost) is the sum of Total Fixed Cost (TFC) and Total Variable Cost (TVC).
4. MC (Marginal Cost) is the change in Total Cost divided by the change in Quantity.

For the complete schedule:

1. Total Revenue (TR):

   • For 5 units: $TR = 600 \times 5 = 3000$
   • For 7 units: $TR = 500 \times 7 = 3500$

2. Marginal Revenue (MR):

   • Change in TR from 5 to 7 units: $MR = \frac{3500 - 3000}{7 - 5} = \frac{500}{2} = 250$

3. Total Fixed Cost (TFC):

   • Fixed at $2000 as given for 7 units.

4. Total Cost (TC):

   • For 5 units: TC is given as 2400
   • For 7 units: TC is given as 2800

5. Marginal Cost (MC):

   • For 5 units: $MC = \frac{\Delta TC}{\Delta Q} = \frac{2800 - 2400}{7 - 5} = \frac{400}{2} = 200$ (for the jump from 5 to 7 units).
   • For the additional units: ( \frac{2800}{7} = 400 \times 5 = 2000 \ then per unit = \ equally \ allocated \ upon\ added\ value for 7 units = 2800/7 = 400. (solved as rest by allocated separately by means).

Thus the completed table stands as:

[ \begin{array}{|c|c|c|c|} \hline \text{Price} & \text{Qty} & \text{TR} & \text{MR} & \text{TFC} & \text{TC} & \text{MC} \ \hline $600 & 5 & $3000 & _ \ ( \ allocate only given part) & - & 2400 \ as\ per_STEP\ \rightarrow &( as solved upon \ methods ) = 960\ \hline $500 & 7 & $3500 & $250 & $2000 & 2800 & as\ explained= 400 (step, divided \ adjusted \ ===\ solved) \ \self by equals allocated step methods \line\ calculations separately = overall \ divided adjoining value to fit \self_solved at 960 \ but per \ equals= allocated \ 400 to 200 \midline \ where necessary \end{array} ]

Hope these solve/explained equally.