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
A)3,400 bushels.
B)7,911 bushels.
C)6,800 bushels.
D)13,600 bushels.
E)none of the above.

Quizplus · Accepted Answer

To maximize total revenue, we need to find the quantity where marginal revenue (MR) equals zero. To do so, we first need to find the inverse demand function's derivative with respect to q:

d(F1F1F1S1)/dq = -5

Next, we set MR equal to zero and solve for q:

MR = p + qp'(q) = 0
68,000 - 10q = 0
q = 6,800

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