Question
Suppose you have been consulted by the owner of a farm that produces corn. The cost of production is given by the cost function C(q)=
Suppose you have been consulted by the owner of a farm that produces corn. The cost of production is given by the cost function C(q)= 2000+0.3q+0.0005q^(2). The market price of corn is $6 a bushel. a. What are the ATC, AVC, and MC? Illustrate them graphically. b. What is the profit-maximizing output of the farmer? What is the total profit the farmer makes at the profit-maximizing output? c. The farmer would like to know how he should vary his output as the price changes. To find the farmer's short-run supply curve and illustrate it graphically.
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