Individual farmers maximize profit by producing the level of output at which
A)Marginal cost equals average cost.
B)Marginal cost equals zero.
C)Marginal cost equals price.
D)Average cost equals zero.

Question

Quizplus · Accepted Answer

Individual farmers maximize profit by producing at the point where marginal cost equals price. At this point, the farmer is producing the optimal amount of output where the cost of producing an additional unit of output (marginal cost) is equal to the revenue gained from selling that unit of output (price). This maximizes the profit for the farmer.

Individual Farmers Maximize Profit by Producing the Level of Output