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Assume the tomato plant operates in a competitive market. The price per unit of tomato produced in this market is K10.
a) Find the marginal revenue of production for the tomato plant? Justify your answer.
b) If the average total cost (ATC) of producing a tomato unit, and the average variable cost (AVC) is K2 and K1 respectively.
i. Calculate the fixed and total costs of producing 1000 units of tomatoes.
ii. Calculate the profit the tomato firm accrues.
iii. What adjustments must this tomato firm expect to happen in this market?
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