How many bushels will the farmer produce to maximize profit

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Since price-takers cannot charge their own price, they can select a quantity which suits them best. Presumably, they would select the profit-maximizing quantity.

Suppose the typical wheat farmer's cost function is TC = 100,000 + 2Q + 0.005Q2 , Q corresponds to thusands of bushels. The market price of wheat is $8 per bushel.
How many bushels will the farmer produce in to maximize profits?

Hint: There are two ways to go about this:
(a) Determine Q by MR = MC
(b)Maximize Profit = TR - TC = (8Q) - (100,000 + 2Q + 0.005Q2 )

Reference no: EM13200950

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