Suppose a farmer is a price taker (MR = P = 6) in soybeans with cost functions given byTC = .1q2 + 2q + 100MC = .2q + 2The firm's supply curve is given by
Question
Suppose a farmer is a price taker (MR = P = 6) in soybeans with cost functions given by
TC = 0.1q<sup>2</sup> + 2q + 100
MC = 0.2q + 2
The firm's supply curve is given by
Solution
The supply curve of a firm in a perfectly competitive market is determined by the point at which the marginal cost (MC) equals the market price (P). In this case, the farmer is a price taker, meaning the price is given and constant at P = 6.
The marginal cost (MC) function is given by MC = 0.2q + 2.
To find the supply curve, we set MC = P and solve for q:
0.2q + 2 = 6 0.2q = 6 - 2 0.2q = 4 q = 4 / 0.2 q = 20
So, the supply curve for this farmer is q = 20. This means that the farmer will supply 20 units of soybeans when the market price is $6.
Similar Questions
The demand of beans in bags is given by the function Q – 36 + 0.4P = 0. Where P is price in naira and Q is quantity, find Q when P =N20
Given a demand curve of P = 225 - 1Qd and supply of P = 3 + 8Qs, find the PROFIT of the firm at the optimal level of production for the firm.
Suppose the market supply curve is p = 5Q. At a price of 10, producer surplus equalsGroup of answer choices50.25.12.50.10.
What is the price elasticity of supply if the supply curve is given by P = 2q? Group of answer choices1234None of the above
P/V Ratio 50%; Variable cost of the produce Rs. 25; Selling price is .a.Rs. 30 .b.Rs. 40.c.Rs. 55.d.Rs. 50 .
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.