The inverse demand function for soybeans is p = 68,000

Question

The inverse demand function for soybeans is p = 68,000 - 5q. Total revenue in this market will be maximized when the quantity of soybeans produced is

Quizplus · Accepted Answer

Total revenue is maximized at the point where marginal revenue equals zero. Marginal revenue can be derived from the inverse demand function by taking the derivative of total revenue with respect to quantity (q):
TR(q) = pq = (68,000 - 5q)q = 68,000q - 5q^2
MR(q) = dTR/dq = 68,000 - 10q

Setting MR(q) equal to zero and solving for q:
68,000 - 10q = 0
10q = 68,000
q = 6,800

Therefore, the quantity of soybeans produced that will maximize total revenue is 6,800 bushels.