The Wheeler Wheat Farm sells wheat to a grain broker in Regina,Saskatchewan.Since the market for wheat is generally considered to be competitive,what would the Wheeler Wheat Farm choose to do to maximize its profit

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Quizplus · Accepted Answer

Since the market for wheat is considered to be competitive, the Wheeler Wheat Farm would be a price taker. To maximize its profit, the farm would produce the quantity at which its marginal cost of production is equal to the market price of wheat. This is because producing any additional quantity beyond the point where marginal cost equals market price would result in lower profits, as the farm would be incurring a cost greater than the revenue earned from selling the additional quantity. Therefore, the Wheeler Wheat Farm would choose to produce the quantity at which market price is equal to the farm's marginal cost of production.

The Wheeler Wheat Farm Sells Wheat to a Grain Broker