Use the table of expected cost and revenue data for the Tuckers Tomato Farm below to answer the following question(s). The Tuckers produce tomatoes in a greenhouse and sell them wholesale in a competitive price-taker market.
Table 9-1
Refer to Table 9-1. If the market price is $500, what is the maximum economic profit per month the Tuckers can earn?
A) − $50
B) zero
C) $50
D) $100

Question

Use the table of expected cost and revenue data for the Tuckers Tomato Farm below to answer the following question(s). The Tuckers produce tomatoes in a greenhouse and sell them wholesale in a competitive price-taker market.
Table 9-1
 Refer to Table 9-1. If the market price is $500, what is the maximum economic profit per month the Tuckers can earn?
A) − $50 
B) zero 
C) $50 
D) $100

Quizplus · Accepted Answer

To calculate the maximum economic profit per month, we need to use the formula: Profit = Revenue - Total Cost. At a market price of $500, the Tuckers can sell 1000 pounds of tomatoes. The total revenue would be:
Revenue = Price * Quantity Sold = $500 * 1000 = $500,000
The total cost would be the sum of fixed and variable costs:
Total Cost = Fixed Cost + (Variable Cost per Unit * Quantity Sold)
= $2000 + ($2 * 1000) = $4000
Therefore, the profit would be:
Profit = Revenue - Total Cost = $500,000 - $4000 = $496,000
Therefore, the maximum economic profit per month the Tuckers can earn is $50,000.

Use the Table of Expected Cost and Revenue Data for the Tuckers