Suppose an avocado farm has cost: C = 0.002q cubed + 22q + 750, (where q is measured in bushels) and the rental cost of land is zero so the average cost curve includes only the farm's costs of labor, capital, materials, and energylong dashnot land. Marginal cost is: MC = 0.006q2 + 22. This cost structure is representative of all firms in this industry. The market price per bushel of avocados is $38. The firm's profit maximizing output (rounded to one decimal place) is A. 20.0 units. B. 79.6 units. C. 51.6 units. D. 89.4 units. In the long-run, we would expect the market price of avocados to: A. decrease. B. remain unchanged. C. increase. D. equal zero.
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