A farmer estimates that if he harvest his soybean crop now he will obtain 1,000 bushels which he can sell P150.00 per bushel. However, he estimates that this crop will increase by an additional 1,200 bushels of soy beans for each week he delays harvesting, but the price will drop at a rate of P25.00 cents per bushel per week; in addition, it is likely that he will experience spoilage of approximately 200 bushels per week for each week he delays harvesting. When should he harvest his crop to obtain the largest total cash return, and how much will be received for his crop at that time.
A farmer estimates that if he harvest his soybean crop now he will obtain 1,000 bushels which he can sell P150.00 per bushel. However, he estimates that this crop will increase by an additional 1,200 bushels of soy beans for each week he delays harvesting, but the price will drop at a rate of P25.00 cents per bushel per week; in addition, it is likely that he will experience spoilage of approximately 200 bushels per week for each week he delays harvesting. When should he harvest his crop to obtain the largest total cash return, and how much will be received for his crop at that time.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A farmer estimates that if he harvest his soybean crop now he will obtain 1,000 bushels which
he can sell P150.00 per bushel. However, he estimates that this crop will increase by an
additional 1,200 bushels of soy beans for each week he delays harvesting, but the price will drop
at a rate of P25.00 cents per bushel per week; in addition, it is likely that he will experience
spoilage of approximately 200 bushels per week for each week he delays harvesting. When
should he harvest his crop to obtain the largest total cash return, and how much will be received
for his crop at that time.
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