The Stinson family owns a farm. Three alternatives exist for how to use the farm: a) Grow wheat. Wheat yield would be 70 bu/acre. The price of wheat is $3.50/bu and production expenses are $140/acre b) Grow Barley. Barley yield would be 50 bu/acre. The price of barley is $2.50/bu and production expenses are $150/acre c) Lease out the acres. the Neighbor will bay $80/acre but they will still have expenses of $35/acre.

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Codiepienagoyaid Codiepienagoyaid · Answer 1

Answer:

Following are the solution to the given questions:

Explanation:

Please find the complete question in the attached file.

In this question, the Stinsons would prefer the most profitable alternative

Formula:

[tex]Profit = Income - Costs = (price \times amount) - Costs \ of \ production[/tex]

In point A:

[tex]\to Profit = (70 \times \$3.5) - \$140[/tex]

[tex]= \$245 - \$140\\\\ = \$105 \ / \ acre[/tex]

In point B:

[tex]\to Profit = (50 \times \$2.5) - \$150[/tex]

[tex]= \$125 - \$150\\\\ = - \$25 \ / \ acre \ (Loss)[/tex]

In point C:

[tex]\to Profit = \$80 - \$35=\$45 \ / \ acre[/tex]