2009Problem_Set_5 v2 - AEM 4150 Price Analysis Fall...

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AEM 4150 Price Analysis Fall Semester 2009 Homework Assignment 5 This assignment is due at the beginning of class on Tuesday, October 6, 2009. Total 13 points 1. Corn farmers have a mandatory demand expansion program where all farmers pay a certain amount to fund a promotion program for corns. You have estimated the following market supply and demand functions for corns, which includes a demand shifter for generic corn promotion: Q d = 60 - 0.30P + 0.004 INC + 0.0000008 PROM Q s = 5P where: Q d Quantity demanded of corns, measured in 10,000 bushel units P Retail price of corns measured in $ per bushel I Per capita consumer disposable income PROM Total generic promotion costs Q s Quantity supplied, measured in 10,000 bushel units When you answer the question, make sure you use the right units! (a) Assume that in 2008, INC = $38,000 and PROM = $30,000,000. Calculate the equilibrium price, quantity, total industry revenue, and the total industry revenue minus promotion costs. (2 points) (b) Calculate the equilibrium price, quantity, total industry revenue, and industry revenue
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This note was uploaded on 08/30/2010 for the course AEM 4150 at Cornell University (Engineering School).

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2009Problem_Set_5 v2 - AEM 4150 Price Analysis Fall...

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