Producer Theory The John Deere company is considering building a new car factory in Moline. The fixed cost of the investment is F = 4. When built, the factory will allow to produce y cars at the variable cost given by c(y) = 4y 2 (a) Explain producer’s theory. Derive the condition on MR and MC that gives profit maximizing level of production. How do we derive a supply curve? (b) Suppose the car market is perfectly competitive, find the optimal level of production if p = 16. How much profit does John Deere make? (c) Find the supply function of John Deere, y(p). Be sure to account for the case where a supply goes to zero. (d) Explain how we can derive a market supply curve.