Question
A purely competitive wheat farmer can sell any wheat he grows for $25 per bushel. His five hectares of land show diminishing returns, because some
A purely competitive wheat farmer can sell any wheat he grows for $25 per bushel. His five hectares of land show diminishing returns, because some are better suited for wheat production than others. The first hectare can produce 1000 bushels of wheat, the second hectare 900, the third 800, and so on. Fill in the table given below to answer the following questions. How many bushels will each of the farmer's five hectares produce? How much revenue will each hectare generate? What are the TR and MR for each hectare?
Hectare # | That Hectare's Yield | That Hectare's Revenue | TR | MR |
0 | na | $0 | $0 | na |
1 | $ | $ | $ | |
2 | $ | $ | $ | |
3 | $ | $ | $ | |
4 | $ | $ | $ | |
5 | $ | $ | $ |
If the marginal cost of planting and harvesting an hectare is $20,000 per hectare for each of the five hectares, how many hectares should the farmer plant and harvest? hectares=
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