-Refer to Figure 9.4.If the market price of hay falls to $18,then to maximize profits this farmer should produce

Name: -Refer to Figure 9.4.If the market price of hay falls to $18,then to maximize profits this farmer should produce
Brand: Quizplus
Rating: 4.9 (50 reviews)

Question

Quizplus · Accepted Answer

The profit-maximizing output is where marginal cost equals marginal revenue. At a price of $18, the marginal revenue is $18. The marginal cost is $20 at an output of 350 bales, so this is the profit-maximizing output.