Question

a. If the market price is $56.00 per bushel of wheat, and Ali chooses to produce wheat, how much will he produce per month to maximize his profits in the short run

Answer 1

Answer:

2000 Bushels of wheat per month

Explanation:

Profit is maximized where Marginal cost equals Marginal Revenue. The revenue is maximized where 2000 bushels are sold for the price of $56 per bushel. The marginal revenue at this point equals the marginal cost. Ali will maximize his profits in the short run based on the marginal revenue and marginal cost equilibrium.