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This problem is about Profit Maximization Gravis is Farnook's leading producer of hydroponic carrots. To Farnook's unique water characteristics, the only input affecting carrot production
This problem is about Profit Maximization
Gravis is Farnook's leading producer of hydroponic carrots. To Farnook's unique water characteristics, the only input affecting carrot production is water. Every other input can be considered fixed. Gravis's production and cost data are provided below: Table 1. Gravis's Production (in tons) and Cost (in dollars) Data for Hydroponic Carrots. Water APP MPP TC TFCTVC AFC AVC ATC MC MR Units TPP 0 0 0 50 50 10 65 2 25 80 3 44 95 4 60 110 5 70 125 6 75 140 7 79 155 8 81 170 9 82 185 1. Fill in the missing data into the table and use the output price as $3.25/ton for his carrots. (5 points) 2. At what water input levels are TPP, APP, MPP maximized? (2 points) What are Gravis's fixed costs (in dollars)? (1 point) If Gravis receives a price of $3.25/ton for his carrots, what is his profit maximizing level of output? Choose the output level that comes closest to satisfying our profit maximizing criteria. What are his profits (in dollars) in this situation? (5 points) Step by Step Solution
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