Suppose a Farmer Is a Price Taker in Soybeans with Cost

question 12

Multiple Choice

Suppose a farmer is a price taker in soybeans with cost functions given by ?
TC = .1q² + 2q + 30
MC = .2q + 2
Suppose the farmer has to purchase a license for $50 per period in order to stay in business. In this case,its new total cost function is

• A)still TC = .1q² + 2
• B)TC = .1q² + .2q + 80
• C)TC = .1q² + 2q + 50
• D)TC = 50

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, resulting in a constant annual charge.

Capital Budgeting

The approach of examining and picking out long-term investments congruent with the aim of enhancing shareholder wealth.

Straight-Line Depreciation

A technique for determining the depreciation of an asset that evenly spreads its cost over its lifespan.

Capital Budgeting

The process by which a business determines and evaluates potential large expenses or investments.