An apple farmer has the following costs:
Bushels Total Cost
0 $200
100 $350
200 $550
300 $800
400 $1,300
500 $2,000
What is the marginal cost per bushel of apples produced?
If the market price of a bushel of apples is $5.50, and is unaffected by the farmer’s production decision, then the marginal revenue of a bushel of apples is $5.50. In that case, how many bushels of apples should the farmer produce?
If the government imposes a tax on the sellers that results in the sellers receiving $1 less per bushel sold, what amount of apples should the farmer choose to produce?