The notion of opportunity cost allows the measurement of tradeoffs

In a Cournot equilibrium, each firm chooses an output level which:

a. maximizes joint profits. b. maximizes the price received. c. maximizes profits given what the other firms produce. d. maximizes revenue given what the other firms produce.

Suppose a farmer is a price taker in soybeans with cost functions given by TC = .1q2 + 2q + 100 MC = .2q + 2 Suppose the farmer has to purchase a license for $50 per period in order to stay in business. In this case, its marginal cost function is

a. still MC = .2q + 2 b. MC = .2q + 50 c. MC = .2q + 52 d. MC = 50