A farmer is deciding whether or not to add fertilizer to his or her crops. If the farmer adds l pound of fertilizer per acre, the value of the resulting crops rises from $80 to $100 per acre. According to marginal analysis, the farmer should add fertilizer if it costs less than:

a. $12.50 per pound

b. $20 per pound.

c. $80 per pound.

d. $100 per pound.

Question

Business

Richard Davidson

9 December, 06:31

A farmer is deciding whether or not to add fertilizer to his or her crops. If the farmer adds l pound of fertilizer per acre, the value of the resulting crops rises from $80 to $100 per acre. According to marginal analysis, the farmer should add fertilizer if it costs less than:

a. $12.50 per pound

b. $20 per pound.

c. $80 per pound.

d. $100 per pound.

+5

Answers (1)

Know the Answer?

Kaya Day · Answer 1

b. $20 per pound.

Explanation:

If the farmer adds l pound of fertilizer per acre, the value of the resulting crops rises from $80 to $100 per acre, then the increased value is $20 = ($100 - $80)

So in order to have profit, the cost of 1 pound of fertilizer must be less than the increased value of $20