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Given Fixed costs $ 110 per acre, and the price drops to 58 cents per pound. Complet the Marginal Revenue. on the table below.

1. What is the most profitable cotton yield if the price is 80 cents per pound? What is the profit or loss per acre?

yield ___________________

Profit or loss ___________________

2. a. If the price does fall to 58 cents per pound, should the farmer produce any cotton?

( ) yes ( ) no

If yes profit maximamizing yield per acre ________________

Profit /loss per acre __________

b. How much would the farmer lose if he did not produce any cotton some year?

Loss per acre _______________

3. If the expected price is only 40 cents per pound, should the farmer try to produce anything?

( ) Yes ( ) No

If he does produce, how much? ___________ lbs per acre.

What would profit/loss be if he produces? ______________ (per acre)

4. what is the lowest price that the farmer can receive and adjust to cover all his costs? At what yield?

Price _______________

Yield _________________

Profit/loss _____________ (per acre)

5. At what price will the farmer top producing ? _________________

Total Product

(lbs./acre)

Total variable

cost

Total fixed

cost

Total cost

Average Cost

Per Lb.

Marginal cost

Marginal Revenue

      

Fixed

Variable

Total

Marginal Cost

Marginal Revenue

      

200

65.80

110

175.8

.55

.33

.88

.224

?

      

250

77.00

110

187

.44

.31

.75

.073

?

      

300

80.68

110

190.68

.36

.27

.63

.14

?

    

 

350

87.59

110

197.59

.314

.25

.56

.15

?

      

400

94.94

110

204.94

.28

.24

.52

.18

?

      

450

103.80

110

213.8

.24

.23

.47

.23

?

      

500

115.30

110

225.30

.22

.23

.45

.02

?

      

550

133.30

110

243.30

.20

.24

.44

.36

?

      

600

155.55

110

265.55

.18

.26

.44

.45

?

      

650

182.80

110

292.80

.17

.28

.45

.56

?

      

700

215.55

110

325.55

.16

.31

.47

.66

?

      

750

254.30

110

364.30

.15

.34

.49

.78

?

      

800

295.80

110

405.8

.14

.37

.51

.83

?

      

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28 Sep 2019

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Related questions

A farmer is producing where MC = MR. Say that half of the cost of producing wheat is the rental cost of land (a fixed cost) and half is the cost of labor and machines (a variable cost). If the average total cost of producing wheat is $26 and the price of wheat is $10, what would you advise the farmer to do? (“Grow something else” is not allowed.)

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At that price, what would be the size of the firm’s profit or loss?

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$ per bag

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