Farmer john can produce as much corn as he wants at the going price of $48 per bushel. at his current production level, the marginal cost is $18. what should the company do?

a. increase production

b. decrease production

c. stay at this level of production

d. none of the above

Question

Jaelynn Johnston

Business

31 January, 21:48

Farmer john can produce as much corn as he wants at the going price of $48 per bushel. at his current production level, the marginal cost is $18. what should the company do?

a. increase production

b. decrease production

c. stay at this level of production

d. none of the above

+3

Answers (1)

Know the Answer?

Chandler Hill · Answer 1

Given that the marginal cost is $18, and the price per Bushel of $48, the farmer can choose to increase production or not. This is because at this margin, the return on investment will be:

(48-18) / 18*100

=166.67%

Which means he'll still be profitable if he chooses to do nothing. The correct answer is:

c. stay at this level of production.

Farmer john can produce as much corn as he wants at the going price of $48 per bushel. at his current production level, the marginal cost is $18. what should the company do?a. increase productionb. decrease productionc. stay at this level of productiond. none of the above

Farmer john can produce as much corn as he wants at the going price of $48 per bushel. at his current production level, the marginal cost is $18. what should the company do?

a. increase production

b. decrease production

c. stay at this level of production

d. none of the above