The table shows the costs that a firm faces when producing corn in a perfectly competitive...

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The table shows the costs that a firm faces when producing corn in a perfectly competitive market. Use it to answer the follo

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Answer 1

Answer #1

Q	TC	MC=Change in TC
0	36	-
1	46	10
2	54	8
3	60	6
4	64	4
5	65	1
6	69	4
7	77	8
8	92	15
9	117	25
10	160	43

Profit maximizing condition under perfectl competitive market is P=MC.

If P=$16 , then the profit maximizing output is 8 bushels of corn. Because when Q=8 , then P>MC and when Q=9 ,then P<MC, therefore the farm should grow 8 bushels of corn.

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Answer 2

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