Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On his farm, Old MacDonald can get thirty 30 cubic-metres of wheat per hectare of land if he does not use fertiliser. If he applies
On his farm, Old MacDonald can get thirty 30 cubic-metres of wheat per hectare of land if he does not use fertiliser. If he applies x kilograms of fertiliser per hectare of land, the marginal product of fertiliser is \left ( 1-\frac{x}{200} ight ) cubic-metres of wheat per kilogram of fertiliser. Suppose that Old MacDonald is a price taker in both the wheat market and the fertiliser market. The price of wheat is three dollars per cubic-metre. The price of fertiliser is thirty cents per kilogram. How many kilograms of fertiliser per hectare of land should be used by Old MacDonald in order to maximise his profits
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started