2. Given that this is zero economic profit, Bud should continue operating. economic cost function, we can conclude that this is an economic profit.

3. P = 2.00 Q = 10,000 Q = 14,000 P = 16.80

4. Quantity demanded at the support price of $2.50 is: Q D = 1937.50 707.5 bushels. $1058.94 in consumer surplus.

5. Workers bear a greater burden of both the income and social security tax. NEED 3 ANSWERS TO GET FULL CREDIT - Perfect information, particularly by buyers - Price takers - Homogeneous product - No barriers to entry - Large number of sellers MR = MC T = MC 1 = MC 2