Question

Seved Help To eam extra money in the summer. you grow tomatoes and sell them at a local farrmers' market for $0.30 per pound. By adding compost to your garden, you can increase your yield as shown in the accomparying 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 for marginal benefit) from cach addlitional pound of compost. Enter your responses in the table below, rounding the marginal benefit of each pound of compost to two declmal plates Additional Pounds Additionalrevenue (or of Pounds of pounds of compost tomatoes marginal benefit) tonatoes 19e 128 125 128 130 131 131.5 If compost costs $0.80 per poun d and your goal is to make as much profit as possible. how many pounds of compost should you add? You should addpounds of compost

Answer 1

Ans:

Additional pounds of tomatoes = change in pounds of tomatoes / change in pounds of compost

Additional revenue = Additional pounds of tomatoes * $0.30 per pound

Table showing additional pounds of tomatoes and additional revenue.

Pounds of compost	Pounds of tomatoes	Additional pounds of tomatoes	Additional revenue
0	100	-	-
1	120	20	$6
2	125	5	$1.5
3	128	3	$0.9
4	130	2	$0.6
5	131	1	$0.3
6	131.5	0.5	$0.15

The profit maximizing level of output is where marginal revenue is above or equal to marginal cost. When 3 pounds of compost is used, marginal revenue is $0.9 per pound and marginal cost is $0.8 per pound. Hence you should add 3 pounds of compost.