Based on your answer to part (a), find the profit-maximizing output level for each farmer.
In the competitive market for organic corn, market demand is QD = 340 – 2P and market supply is QS= 100 + 4P, where P is the price per bushel, and Q is market output in thousands of bushels. Each individual farmer faces a marginal cost function of MC = 10 + 3q, where q is the single farmer’s output level in thousands.
The profit-maximizing output level for each farmer is found where MR = MC. Find the result as follows:
MR = MC
Substituting: 40 = 10 + 3q
Solving: 3q = 30, or q = 10 thousand bushels
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