9 The profits of Du Pont de Nemours and Company in 1997 were about $2.4 billion. Does this mean that Du Pont’s economic profit equaled $2.4 billion? Why or why not?
18 If the demand curve for wheat in the United States is P = 12.4 – 4QD where P is the farm price of wheat (in dollars per bushel) and QD is the quantity of wheat demanded (in billions of bushels), and the supply curve for wheat in the United States is P = -2.6 + 2QS, where QS of the quantity of wheat supplied (in billions of bushels), what is the equilibrium price of wheat? What is the equilibrium quantity of wheat sold? Must the actual price equal the equilibrium price? Why or why not?
33. The Mineola Corporation hires a consultant to estimate the relationship between its profits and its output. The consultant reports that the relationship is
π = -10 – 6Q + 5.5Q2 – 2Q3 + 0.25Q4
a. The consultant says that the firm should set Q equal to 1 to maximize profit. Is it true that dπ/dQ = 0 when Q=1? Is π at a maximum when Q = 1?
b. Mineola’s executive vice president says that the firm’s profit is a maximum when Q=2. Is this true?
c. If you are the chief executive officer of the Mineola Corporation, would you accept the consultant’s estimate of the relationship between profit and output as correct?