To maximize his profits in the short run, Ali should produce the quantity of wheat where his marginal cost equals the market price.
If his marginal cost is lower than the market price, he should produce more.
If his marginal cost is higher than the market price, he should produce less.
In order to maximize his profits in the short run, Ali should produce the quantity of wheat that corresponds to the point where his marginal cost (MC) equals the market price of wheat.
This is because at that point, Ali will be able to sell each bushel of wheat for the highest price while minimizing his production costs.
To determine the quantity that Ali should produce, he needs to compare his marginal cost (MC) with the market price. If his MC is lower than the market price, he should produce more.
If his MC is higher than the market price, he should produce less.
At the point where MC equals the market price, Ali should produce that quantity to maximize his profits.
For example, if Ali's MC is $50 per bushel and the market price is $56 per bushel, Ali should continue producing wheat because his MC is lower than the market price.
If his MC was $60 per bushel, however, he should reduce his production because his MC is higher than the market price.