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Reduce the profit from alfalfa in Table 8-2 to $36 per acre, calculate the new output profit ratio, and find the new profit - maximizing combination. Do you produce more or less of the enterprise with the now lower profit? Why? What would be the effect of doubling both profits per acre? Halving both profits per acre? TABLE 8-2 Profit from Various Combinations of Alfalfa and Grain Sorghum Acres of alfalfa 0 100 200 300 400 500 600 700 Acres of grain sorghum 1,000 975 925 345 745 620 470 270 0 300 "Prod is 8.50 per are for alfaits and 830 per are for grain sorgham Profit from alfalfa (S) 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Profit from grain sorghum (S) 30,000 29,250 27,750 25,350 22,350 18,600 14,100 8,100 0 Total profit (5) 30,000 34,250 37,750 40,350 42,350 43,600 44,100 43,100 40,000

Reduce the profit from alfalfa in Table 8-2 to $36 per acre, calculate the new output profit ratio, and find the new profit - maximizing combination. Do you produce more or less of the enterprise with the now lower profit? Why? What would be the effect of doubling both profits per acre? Halving both profits per acre? TABLE 8-2 Profit from Various Combinations of Alfalfa and Grain Sorghum Acres of alfalfa 0 100 200 300 400 500 600 700 Acres of grain sorghum 1,000 975 925 345 745 620 470 270 0 300 "Prod is 8.50 per are for alfaits and 830 per are for grain sorgham Profit from alfalfa (S) 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Profit from grain sorghum (S) 30,000 29,250 27,750 25,350 22,350 18,600 14,100 8,100 0 Total profit (5) 30,000 34,250 37,750 40,350 42,350 43,600 44,100 43,100 40,000

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter9: Price Takers And The Competitive Process
Section: Chapter Questions
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Reduce the profit from alfalfa in Table 8-2 to $36 per acre, calculate the new output profit ratio, and find the new profit - maximizing combination. Do you produce more or less of the enterprise with the now lower profit? Why? What would be the effect of doubling both profits per acre? Halving both profits per acre? TABLE 8-2 Profit from Various Combinations of Alfalfa and Grain Sorghum Acres of alfalfa 0 100 Acres of grain sorghum 1,000 975 925 845 745 200 300 400 500 600 700 800 "Profit is $50 per acre for alfalfa and $30 per acre for grain sorghum 620 470 270 0 Profit from alfalfa (5) 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Profit from grain sorghum ($) 30,000 29,250 27,750 25,350 22,350 18,600 14,100 8,100 0 Total profit ($) 30,000 34,250 37,750 40,350 42,350 43,600 44,100 43,100 40,000
Transcribed Image Text:Reduce the profit from alfalfa in Table 8-2 to $36 per acre, calculate the new output profit ratio, and find the new profit - maximizing combination. Do you produce more or less of the enterprise with the now lower profit? Why? What would be the effect of doubling both profits per acre? Halving both profits per acre? TABLE 8-2 Profit from Various Combinations of Alfalfa and Grain Sorghum Acres of alfalfa 0 100 Acres of grain sorghum 1,000 975 925 845 745 200 300 400 500 600 700 800 "Profit is $50 per acre for alfalfa and $30 per acre for grain sorghum 620 470 270 0 Profit from alfalfa (5) 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Profit from grain sorghum ($) 30,000 29,250 27,750 25,350 22,350 18,600 14,100 8,100 0 Total profit ($) 30,000 34,250 37,750 40,350 42,350 43,600 44,100 43,100 40,000
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