3. Mr. Davis has been growing cherries on his 1,000 -acre farm in Shafter for about 20 years. His average production yield history (APH) is 4700 pounds per acre. The average price of cherries is \$ 4.10 per pound, but it is variable from year to year and hence risky. A. Explain to Mr. Davis the difference between yield insurance and revenue insurance. Under what conditions would revenue insurance be preferable to yield insurance? B. Assume the indemnity price for cherries is $5.00 per pound. Also assume that you convinced Mr. Davis to purchase yield insurance, which costs him \$ 1.25 per pound (after subsidies) for 70% coverage level. Shafter experienced unfavorable weather this year, and Mr. Davis's yields fall to 3500 pounds per acre. Given these circumstances, does Mr. Davis get an indemnity payment? If so, how much is his total payment, i.e., what does he receive from the insurance company? How much did Mr. Davis pay for the insurance? What was his overall return from purchasing the insurance