Suppose a farmer is a price taker in soybeans with cost functions given by ?
TC = .1q² + 2q + 100
MC = .2q + 2
Suppose the farmer has to purchase a license for $50 per period in order to stay in business. In this case,its marginal cost function is

Question

Quizplus · Accepted Answer

The marginal cost (MC) function represents the additional cost of producing one more unit of a good. The license fee is a fixed cost, not a variable cost, so it does not affect the marginal cost of production.

Suppose a Farmer Is a Price Taker in Soybeans with Cost