Question

To earn extra money in the summer, you grow tomatoes and sell them at a local farmers' market for $0.15 per pound. By adding compost to your garden, you can increase your yield as shown in the accompanying table Instructions: Determine the number of additional pounds of tomatoes you are able to grow by using each additional pound of compost. Then compute the additional revenue (or marginal benefit) from each additional pound of compost. Enter your responses in the table below, rounding the marginal benefit of each pound of compost to two decimal places Additional Additional revenue (or Pounds of Pounds of pounds of tomatoes 180 tomatoesarginal benefit | , |-6.00 | 0 $I 1.5010 201 120 128 130 131 131.5 ー21 O | s_o.ee. O $.60 s.30 0.15 0.5 your goalis to make as much profit as possible, how many pounds of compost should You should add L_AO pounds of compost.

Answer 1

To find additional revenue, we have to calculate total revenue.

Total revenue = Price x Quantity

Additional revenue = Change in Total revenue/Change in pounds of compost

Firm should add 5 pounds of compost because additional adding decreases marginal benefit.