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, we need to subtract the total cost from the total revenue. At a market price of $500, the Tuckers can sell 300 bushels of tomatoes per month, earning a total revenue of $150,000. The total cost of producing 300 bushels of tomatoes is $149,950 ($60,000 fixed cost + $29,700 variable cost + $60,250 opportunity cost of the land). Therefore, the maximum economic profit is $50 ($150,000 - $149,950).

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