Purchase Solution

Smiling Cow Dairy Milk Producer

Not what you're looking for?

Ask Custom Question

Smiling Cow Dairy can sell all the milk it wants for $4 a gallon, and it can rent all the robots it wants to milk the cows at a capital rental price of $100 a day. if faces the following production schedule:

Number of Robots Total Product
_____________________________________________________
0 0 gallons
1 50
2 85
3 115
4 140
5 150
6 155

a) In what kind of market structure does the firm sell its output? How can you tell?

b) In what kind of market structure does the firm rent robots? How can you tell?

c) Calculate the marginal product and the value of the marginal product for each additional robot.

d) How many robots should the firm rent? Explain.

Purchase this Solution

Solution Summary

Smiling Cow Dairy can sell all the milk it wants for $4 a gallon, and it can rent all the robots it wants to milk the cows at a capital rental price of $100 a day. if faces the following production schedule:

Solution Preview

a. perfect competition, because it has no control over the price it gets for its products.
b. perfect competition, because the price does not respond to how many robots it wants and so at least in theory, it is saying it could by hundred and hundreds if not thousands and that would constitute a very small part of the ...

Purchase this Solution


Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.