$$\begin{array}{l}
\begin{array} { c | c }
\begin{array} { c }
\text { Output } \
\text { (Bushels of } \
\text { Barley) }
\end{array} & \begin{array} { c }
\text { Marginal } \
\text { Cost } \
\text { (Dollars) }
\end{array} \
\hline 10 \text { bushels } & \$ 0.30 \
20 \text { bushels } & \$ 0.60 \
30 \text { bushels } & \$ 0.90 \
40 \text { bushels } & \$ 1.20
\end{array}\
\text { Table } 5.1
\end{array}$$ Refer to Table 5.1,which gives Farmer McColl's marginal cost function for barley.If Farmer McColl is currently producing 25 bushels of barley,which of the following could be the market price for a bushel of barley?

Question

$$\begin{array}{l}
\begin{array} { c | c } 
\begin{array} { c } 
\text { Output } \
\text { (Bushels of } \
\text { Barley) }
\end{array} & \begin{array} { c } 
\text { Marginal } \
\text { Cost } \
\text { (Dollars) }
\end{array} \
\hline 10 \text { bushels } & \$ 0.30 \
20 \text { bushels } & \$ 0.60 \
30 \text { bushels } & \$ 0.90 \
40 \text { bushels } & \$ 1.20
\end{array}\
\text { Table } 5.1
\end{array}$$ Refer to Table 5.1,which gives Farmer McColl's marginal cost function for barley.If Farmer McColl is currently producing 25 bushels of barley,which of the following could be the market price for a bushel of barley?

Quizplus · Accepted Answer

The marginal cost for producing the 25th bushel of barley lies between the marginal cost for the 20th bushel ($0.60) and the 30th bushel ($0.90). Therefore, a market price of $0.75 would make sense, as it is within this range and would cover the cost of producing the 25th bushel.