Did tomatofest suffer an economic loss

Reference no: EM131323683

Fierce storms in October 2004 caused TomatoFest Organic Heirlooms Farm to end its tomato harvest two weeks early. According to Gary Ibsen, a partner in this small business (Carolyn Said, "Tomatoes in Trouble," San Francisco Chronicle, October 29, 2004, C1, C2), TomatoFest lost about 20,000 pounds of tomatoes that would have sold for about $38,000; however, because he did not have to hire pickers and rent trucks during these two weeks, his net loss was about $20,000. In calculating the revenue loss, he used the post-storm price, which was double the pre-storm price.

a. Draw a diagram for a typical firm next to one for the market to show what happened as a result of the storm. Assume that TomatoFest's experience was typical of that of many small tomato farms.

b. Did TomatoFest suffer an economic loss? What extra information (if any) do you need to answer this question? How do you define "economic loss" in this situation?

Reference no: EM131323683

Questions Cloud

Describe the importance of the market for loanable funds : Discuss the importance of the market for loanable funds and the market for foreign-currency exchange to the achievement of the strategic plan

Which is the profit maximizing output : Many marginal cost curves are U-shaped. As a result, it is possible that the MC curve hits the demand or price line at two output levels. Which is the profitmaximizing output? Why?

Identify two ways to express interest rate parity : Explain the implied repo rate on a U.S. Treasury bond futures spread position ? Identify two ways to express interest rate parity based on how interest rates are quoted.

Analyze the major way in which ifrs and gaap differ : Analyze the major way in which IFRS and GAAP differ on the accounting treatment of your chosen asset. Based on your analysis, take a position on which method is more effective in financial reporting. Support your position with at least two (2) exa..

Did tomatofest suffer an economic loss : Draw a diagram for a typical firm next to one for the market to show what happened as a result of the storm. Assume that TomatoFest's experience was typical of that of many small tomato farms.

Illustrate the arbitrage strategy for one contract : Illustrate the arbitrage strategy for one contract. To show the dollar arbitrage, assume the one-month LIBOR rate on December 1 was 7 percent.

Describe three strategies that would be particularly helpful : Identify and describe three strategies that would be particularly helpful. How might proactive political strategies help protect firms from future changes in the political environment?

How does this fit into your beliefs about leadership style : The graduate nurse evidences leadership as seen in the four domains: the profession of nursing, clinical practice arena, health policy arena, and systems level. In order to complete this assignment, complete the short eighteen-question quiz (this ..

Determine the annualized rate of return : Determine the annualized rate of return she earns over 180 days and compare it to the annualized rate of return on the 180-day CD.

User Account

All Pages