Question

Blinn Agriculture Number of Weight cwt.) Steers MPP APP TFC AVC ATC 0988 98888888 33 630 640 640 21 22 23 The cost for fixed amount of pasture land (depreciation on fences, the opportunity cost of the land, Insurance, water facilities on the land) is $10,000 The cost of supplemental feed, transportation, fuel, and vet expenses are $950 per steer Steers will sell for $175.00 per cwt.

Answer 1

Answer:

Given,

TFC=$10000

TVC=$990 per steer

Thus, TC=TFC+TVC

We know that,

$MC=\frac{\Delta Q}{\Delta S}=\frac{\partial (TC)}{\partial S}$

$ATC=\frac{TC}{S}$

$AFC=\frac{TFC}{S}$

$AVC=\frac{TVC}{S}$

$MPP=\frac{\partial Q}{\partial S}$

$APP=\frac{Q}{S}$

$TR=P*Q=175*Weight$

$\pi =TR-TC$

where Q=output (here it is weight, cwt) and S=input (here it is number of steers)

Using the above formulae we get the following results given in the table,

Price=175/cwt VC=S990/steer Number Weight (cwt.) MPP APP TFC (9) TVC (9) TC (5) MC (9) AFC (5) AVC (S) ATC (9) TR (S) Profit (S) of Steers 75 150 10000 0 10000 87.50 10000 99001 19900 87.50 10000l 19800 29800 87.50 10000 29700 397001 77.38 100001 3960049600 77.20 10000| 49500 59500 67.00 10000 59400 69400 66.79| 10000 69300 79300 6.56 100001 79200 89200 56.33 1000089100 99100 4 6.10 10000 99000 109000 25.73 10000 108900 118900 15.33| 10000 118800 128800 0 4.92 10000 128700 138700 990 1000.00 990 500.00 990 333.33 990 250.00 990 200.00 990 166.67 990 142.86 990 125.00 990 111.11 990 100.00 990 90.91 990 83.33 990 76.92 0 -10000 990 1990.00 13125 -6775 990 1490.00 26250 -3550 990 1323.33 39375 -325 990 1240.00 51625 2025 990 1190.00 63000 35001 990 1156.67 73500 4100 990 1132.86 83125 3825 990 1115.00 91875 2675 990 1101.11 99750 650 990 1090.00 106750 -2250 990 1080.91 110250 -8650 990 1073.33 112000 -16800 990 1066.92 112000 -26700 570 120 1301 6301 640 640

The table shows that when S=60, profit is maximized.