Farmer Brady sells wheat in a market where sellers are price takers. Which of the following is Farmer Brady's ideal production and pricing strategy?

Question

Quizplus · Accepted Answer

Since Farmer Brady is a price taker, he cannot influence the market price of wheat. Therefore, his ideal strategy would be to produce the quantity that maximizes his profits given the market price. Since he cannot sell his wheat at a higher price than the market price, it would not be senseless for him to try to raise the price of his product. Instead, he should focus on minimizing his per-unit production costs to maximize his profits.

Farmer Brady Sells Wheat in a Market Where Sellers Are