Q1. Two farmers are considering moving into a new market. Farmer A is 90 miles away from the new market, whereas Farmer B is only 60 miles away from the new market? However, since we have learned in our readings, the cost of transportation tends to decrease with distance. Farmer A transportation cost drops to $0.30/unit/mile. If Farmer A, can produce apples for $25 per bushel and Farmer B can produce their apples for $20/bushel but Farmer B has higher transportation cost of $0.60/unit mile. Which farmer would have the lowest landed cost for apples? Farmer A or Farmer B?

Q2. You have been asked to calculate the landed cost for two apple producers. Farm A can produce apples for $35 per bushel. Farm A has a fixed transportation cost of $0.40/unit/mile. Farmer B can produce their apples for $25/bushel but has higher transportation cost of 0.60/unit/mile. For this example, there are no other cost. Knowing this information calculate the following:

What is the landed cost per unit for each of the products if their main market is 50 miles away?

Farmer A = ?

Farmer B = ?