Sweet Husks is a perfectly competitive corn farm. Currently, the expected price of an ear of corn is $0.30 and, at its current production level, Sweet Husks has a marginal cost of $.40 per ear. Which of the following statements is true?
A) Because the expected profit from an additional ear of corn is $0.10, Sweet Husks should decrease production to maximize its expected profit.
B) Because the expected profit from an additional ear of corn is -$0.10, Sweet Husks should decrease production to maximize its expected profit.
C) Because the expected profit from an additional ear of corn is $0.70, Sweet Husks should increase production to maximize its expected profit.
D) Because the expected profit from an additional ear of corn is $0.10, Sweet Husks should increase production to maximize its expected profit.
B) Because the expected profit from an additional ear of corn is -$0.10, Sweet Husks should decrease production to maximize its expected profit.
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Using the midpoint method, the price elasticity of demand for a good is computed to be approximately 2 . Which of the following events is consistent with a 0.1 percent increase in the price of the good?
a. The quantity of the good demanded decreases from 250 to 150. b. The quantity of the good demanded decreases from 200 to 100. c. The quantity of the good demanded decreases by 0.05 percent. d. The quantity of the good demanded decreases by 0.2 percent.
Tangible items that are longer lived are called ______.
a. nondurable services b. durable services c. nondurable goods d. durable goods