Use the table of expected cost and revenue data for the Tuckers Tomato Farm below to answer the following question(s). The Tuckers produce tomatoes in a greenhouse and sell them wholesale in a competitive price-taker market.
Table 9-1
Refer to Table 9-1. If the Tuckers are profit maximizers, how many tomatoes should they produce when the market price is $500 per ton?
A) 6
B) 7
C) 8
D) 9

Question

Use the table of expected cost and revenue data for the Tuckers Tomato Farm below to answer the following question(s). The Tuckers produce tomatoes in a greenhouse and sell them wholesale in a competitive price-taker market.
Table 9-1
 Refer to Table 9-1. If the Tuckers are profit maximizers, how many tomatoes should they produce when the market price is $500 per ton?
A) 6 
B) 7 
C) 8 
D) 9

Quizplus · Accepted Answer

To determine the profit-maximizing quantity of tomatoes, the Tuckers should produce at the quantity where Marginal Cost (MC) = Marginal Revenue (MR).

At a market price of $500 per ton, the corresponding MR in the table is $65.

From the table, we can see that at a quantity of 7, MC is equal to $65. Therefore, the Tuckers should produce 7 tons of tomatoes to maximize their profit when the market price is $500 per ton.

Use the Table of Expected Cost and Revenue Data for the Tuckers