Question 1. Chapter 8. Suppose a farmer is a price taker (i.e. perfectly competitive) for soybean

sales with a cost function given by

TC=0.1q2+2q+100

(15pt) Find the marginal cost function.

(15pt) What is this firms supply function?

Hint: Supply function expresses q (quantity) as a function of P (price).

(10pt) What is the profit maximizing level of output in the long-run?

(10pt) What is the long-run profit for this firm?

f. (5pt) Suppose the farmer has to purchase a license for $50 per period in order to stay in business. In this case, what is its marginal cost function?