Doug’s farm in Idaho has four major fields that he uses to grow potatoes. The productivity of each field follows:

Assume that each field is the same size and that the variable costs of farming are $25,000 per year per field. The variable costs cover labor and machinery time, which is rented.
Doug must decide each year how many fields to plant. In 2009, potato farmers received $6.35 per 100 pounds. How many fields did Doug plant? Explain. By 2011, the price of potatoes had fallen to $4.50 per 100 pounds. How will this price decrease change Doug’s decision? How will it affect his demand for labor? How will it affect the value of Doug’s land?