Question

Hack’s Berries faces a short-run total cost of production given by TC = Q3 – 12Q2 + 100Q + 1000, where Q is the number of crates of berries produced per day. Hack’s marginal cost of producing berries is 3Q2 – 24Q + 100.

c. If berries sell for $60 per crate, how many berries should Hack produce? How do you know? (Hint: You may want to remember the relationship between MC and AVC when AVC is at its minimum.)

d. If the price of berries is $73 per crate, how many berries should Hack produce? Explain.

Answer 1