Andre, a wheat farmer, is deciding whether or not to add fertilizer to his crops. If he adds 1 pound of fertilizer per acre, the value of the resulting crops rises from $80 to $100 per acre. According to marginal analysis, Andre should add fertilizer if it costs less than
A) $12.50 per pound.
B) $20 per pound.
C) $80 per pound.
D) $100 per pound.

Question

Quizplus · Accepted Answer

The marginal benefit of adding fertilizer is $20 per acre ($100 - $80). According to marginal analysis, Andre should add fertilizer if the cost is less than the marginal benefit, which is $20 per pound.

Andre, a Wheat Farmer, Is Deciding Whether or Not to Add