A goatherd has the cost function c(y)= 4y2, where y is the number of tubs of goat cheese she makes per month.She faces a competitive market for goat cheese,with a price of $40 a tub.How many tubs should she produce per month?
A)The square root of 40
B)16
C)5
D)The square root of 10
E)2.50

Question

Quizplus · Accepted Answer

To find the profit-maximizing quantity, we need to set marginal cost equal to marginal revenue.
Marginal cost:
c'(y) = 8y
Marginal revenue:
$40 (since the goat herd is facing a competitive market)
Setting c'(y) = MR, we get:
8y = 40
y = 5

Therefore, the goat herd should produce 5 tubs of goat cheese per month to maximize profits.

A Goatherd Has the Cost Function C(y)= 4y2, Where Y