Gus has 20 acres of land in cultivation and is currently planting both soybeans
ID: 1093058 • Letter: G
Question
Gus has 20 acres of land in cultivation and is currently planting both soybeans and peanuts. The last acre planted in soybeans yielded 20 bushels, and the last bushel of soybeans added $0.50 to Gus's total revenue. The last acre planted in peanuts yielded 10 bushels and the last bushel of peanuts added $1 to Gus's total revenue. Gus:
a.maximizing profit.
should devote more acres to soybeans and fewer to peanuts.
. should devote more acres to peanuts and fewer to soybeans.
d.should devote 10 acres to each crop.
a.maximizing profit.
bshould devote more acres to soybeans and fewer to peanuts.
c. should devote more acres to peanuts and fewer to soybeans.
d.should devote 10 acres to each crop.
Explanation / Answer
a.maximizing profit.
Marginal revenue from last acre in soybean = $0.50*20 = $10
Marginal revenue from last acre in peanuts = $1*10 = $10
As, Marginal revenue from last acre in soybean = Marginal revenue from last acre in peanuts, Gus is maximizing his total revenue.
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