Jimmy grows corn. His total revenue and total cost are in the above table. What quantity of corn maximizes his profit and what is his profit? What is the marginal revenue and marginal cost at this quantity?
What will be an ideal response?
Jimmy's profit is greatest if he grows either 40,000 or 50,000 bushels of corn. His (economic) profit at either amount is $10,000 a week. Between 40,000 and 50,000 bushels of corn, Jimmy's marginal revenue is $30,000, or $3 per bushel and his marginal cost is $30,000, or $3 per bushel.
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