Question
Cuc Farms grows and sells cucumbers. Currently, the company sells cucumbers for $4.50 per pound and has variable costs of $3.40 per pound. Cuc Farms
Cuc Farms grows and sells cucumbers. Currently, the company sells cucumbers for $4.50 per pound and has variable costs of $3.40 per pound. Cuc Farms is considering switching to all natural fertilizers. If it does so, its cucumbers would be considering "organic". Switching to natural fertilizers would increase variable costs per pound by $0.20 and require an additional investment of $5,000 in fixed costs for equipment. Other fixed costs would not change. Assuming Cuc Farms can sell 20,000 pounds of cucumbers (regular or organic), what would the market price per pound for "organic" cucumbers need to be such that Cuc Farm was indifferent between the two options? Assume Cuc Farms is focused on profit and does not expect any additional benefits from switching. Round your answer to two decimal places (e.g., 9.87). Do not include a "S".
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