Antoinette’s coastal property in Mississippi has five major ponds that she uses to raise shrimp. The productivity of each pond follows: 

Assume that each pond is the same size and that the variable costs of raising shrimp are $18,000 per year per pond. The variable costs cover labor and machinery time, which is rented. 

Antoinette must decide each year how many ponds to stock. In 2018, Shrimp farmers received $3.50 per pound. How many ponds did Antoinette stock? Explain. By 2019, the price of shrimp had fallen to $2.00 per pound. How will this price decrease change Antoinette’s decision? How will it affect her demand for labor? How will it affect the value of Antoinette’s land?

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Pond 1 Pond 2 Pond 3 Pond 4 Pond 5 Annual Yield, Pounds 18,000 11,000 8,000 5,000 4,000