Suppose a farmer in Georgia begins to grow peaches He uses $1,000,000 in savings to purchase land, he rents equipment for $70,000 a year, and he pays workers $100,000 in wages In return, he produces 200,000 baskets o peaches per year, which sell for $3.00 each Suppose the interest rate on savings is 5 percent and that the farmer could otherwise have earned $30,000 as a shoe salesman. What is the farmer's economic profit?

Suppose a farmer in Georgia begins to grow peaches He uses $1,000,000 in savings to purchase land, he rents equipment for $70,000 a year, and he pays workers $100,000 in wages In return, he produces 200,000 baskets o peaches per year, which sell for $3.00 each Suppose the interest rate on savings is 5 percent and that the farmer could otherwise have earned $30,000 as a shoe salesman. What is the farmer's economic profit?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance

Section: Chapter Questions

Problem 1.3P

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