Kroger, the country's leading grocery-only chain, added a line of private latbel organic and natural foods call Simple Truth to its stores. If you've priced organic foods,you know they are more expensive. For example, a dozen conventionally farmed Grade-A eggs at Kroger costs consumers $1.5, whereas Simple Truth eggs are pricedat $3.5 per dozen. One study found that, overall, the average price of organic foods is 85 percent more than that of conventional foods. However, if prices get too high,consumers will not purchase the organic options. One element of sustainability is organic farming, which costs much more than conventional farming, and those highercosts are passed on to consumers. Suppose that a conventional egg farmer's average fixed costs per year for conventionally-farmed eggs are $1 milion per year, butan organic egg farmer's fixed costs are four times that amount. Further assume that the organic farmer's variable costs of $2.7 per dozen are three times as much asconventional farmer's variable costs.Most large egg farmers sell eggs directly to retailers. Using Kroger's prices, what is the farmer's price per dozen to the retailer for conventional and organic eggs ifKroger's margin is 10 percent based on its retail price?The price the farmer sells a dozen of oconventional eggs is $(Round to the nearest cent.)

*Answer: To begin, consider how profit margin is computed as a percentage. The price at which a…

Kroger, the country's leading grocery-only chain, added a line of private latbel organic and natural foods call Simple Truth to its stores. If you've pr you know they are more expensive. For example, a dozen conventionally farmed Grade-A eggs at Kroger costs consumers $1.5, whereas Simple at $3.5 per dozen. One study found that, overall, the average price of organic foods is 85 percent more than that of conventional foods. However consumers will not purchase the organic options. One element of sustainability is organic farming, which costs much more than conventional fam costs are passed on to consumers. Suppose that a conventional egg farmer's average fixed costs per yoar for conventionally-farmed eggs are $1 an organic egg farmer's fixed costs are four times that amount. Further assume that the organic farmer's variable costs of $2.7 per dozen are thre conventional farmer's variable costs. Most large egg farmers sell eggs directly to retailers. Using Kroger's prices, what is the farmer's price per dozen to the retailer for conventional am Kroger's margin is 10 percent based on its retail price? (Round to the nearest cent.) The price the famer sells a dozen of conventional eggs is $

Kroger, the country's leading grocery-only chain, added a line of private latbel organic and natural foods call Simple Truth to its stores. If you've pr you know they are more expensive. For example, a dozen conventionally farmed Grade-A eggs at Kroger costs consumers $1.5, whereas Simple at $3.5 per dozen. One study found that, overall, the average price of organic foods is 85 percent more than that of conventional foods. However consumers will not purchase the organic options. One element of sustainability is organic farming, which costs much more than conventional fam costs are passed on to consumers. Suppose that a conventional egg farmer's average fixed costs per yoar for conventionally-farmed eggs are $1 an organic egg farmer's fixed costs are four times that amount. Further assume that the organic farmer's variable costs of $2.7 per dozen are thre conventional farmer's variable costs. Most large egg farmers sell eggs directly to retailers. Using Kroger's prices, what is the farmer's price per dozen to the retailer for conventional am Kroger's margin is 10 percent based on its retail price? (Round to the nearest cent.) The price the famer sells a dozen of conventional eggs is $

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.2P

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