Homework SourseA farmer produces wheat Wheat is a homogeneous product so th
A farmer produces wheat. Wheat is a homogeneous product so that the wheat industry behaves very close to a perfect competitive industry. Now this farmer can sell any wheat he grows for $20 per bushel. His five acres of land show diminishing returns because some are better suited for wheat production than others. The first acre can produce 1,000 bushels of wheat, the second acre 900, the third 800, and so on a. Use the table below to answer the following questions. How many bushels will each of the farmer\'s five acres produce? How much revenue will each acre generate? What are the TR and MR for each acre? nstructions: Enter your answers as whole numbers. Numbers of |That Acre\'s That Acre\'s Yield TR MR Acres $0 50 b. If the marginal cost of planting and harvesting an acre is $18,000 per acre for each of the five acres, how many acres should the farmer plant and harvest? acres.
Solution
PART-A) Solution:
No. of acres
That Acre Yield
Total Acre Yield
TR
MR
1
1000
20,000
20,000
20,000
2
900
18,000
38,000
18,000
3
800
16,000
54,000
16,000
4
700
14,000
68,000
14,000
5
600
12,000
80,000
12,000
?
PART-B) Solution: 2 acres
Working:
No. of acres
That Acre Yield
Total Acre Yield
TR
MR
1
1000
20,000
20,000
20,000
2
900
18,000
38,000
18,000
| No. of acres | That Acre Yield | Total Acre Yield | TR | MR |
| 1 | 1000 | 20,000 | 20,000 | 20,000 |
| 2 | 900 | 18,000 | 38,000 | 18,000 |
| 3 | 800 | 16,000 | 54,000 | 16,000 |
| 4 | 700 | 14,000 | 68,000 | 14,000 |
| 5 | 600 | 12,000 | 80,000 | 12,000 |
