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1) The mining of phosphate (for making fertilizer) can cause extensive air pollution. In certain locations in Florida, phosphate mining occurs in the vicinity of orange groves. Assume that this firm is a price taker when it sells phosphate. The private marginal costs of mining phosphate are as follows:
Tons mined per month
Private marginal cost
60
120
240
180
360
a) Draw in the firm's supply curve. Interpolate from the 3 points in the table so that the supply curve is smooth and linear. If the market price for phosphate is $300, what quantities will the firm supply? At that level of output, what are the firm's total costs? What is the firm's producer surplus? (Use the $300/ton price in the remaining questions below.)
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