Yolanda’s Farms produces organic wheat, and has estimated the following cubic co
ID: 1191541 • Letter: Y
Question
Yolanda’s Farms produces organic wheat, and has estimated the following cubic cost function, where the quantity is measured in thousands of bushels, and the cost is in dollars per bushel: C = 12 + 5 Q – 1.8 Q 2 + 0.3 Q 3
What is the marginal cost when the firm produced Q = 3.0 thousand bushels?
A. MC = $1.63
B. MC = $2.30
C. MC = $2.98
D. MC = $5.82
E. MC = $6.90
And currently, the market price is fixed at P = $9.50 per bushel. What is the profit-maximizing quantity, and the current profit (rounded to the nearest dollar) when this quantity is produced?
A. Q = 2.5061 thousand p = – $1,033
B. Q = 3.1416 thousand p = $16,245
C. Q = 4.0000 thousand p = $21,000
D. Q = 5.0000 thousand p = $18,000
E. Q = 6.7824 thousand p = $28,944
Explanation / Answer
B. MC = $2.30
D. Q = 5.0000 thousand p = $18,000
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