Question

Complete the table and use your calculations to answer the following questions A potato grower is trying to determine how much water to use from the experimental data in the table below which demonstrates the results of using different levels of irrigation water per acre of potatoes. Complete the table and answer the questions on the next page Potatoes sell for $7.50 per cwt. Marginal Input Cost Marginal Cost Irrigation Water (acre-in.) Average Physical Product XXX Marginal Physical Product XXX @ $12.00/in. Potatoes (cwt.) 165 199 214 226 Marginal Value Product XXX 85.00 37.50 30.00 17.50 12.50 @ $6.00/in. XXX DO @ $12.00/in. XXX 12.00 XXX @ $6.00/in. XOX 0.55 5.00 2.40 1.50 2.51 2.33 1.67 238 242 35.61 25. Il 19.42 15.81 13.44 1.67 10.29 9.19 8.11 Marginal Revenue XXX 1.50 1.50 7.50 1.50 1.50 1.50 7.50 7.56 1.50 7.90 EE BB 8888BBB 1-35 10.00 4.50 5.14 1.20 9.60 17.00 18.00 245 11.00 12.00 12.00 17.00 11.00 17.00 17.00 1.00 0.67 0.53 1.09 7.50 5.00 247 9.00 18.00 248 245 -7.50

questions 6,7,8,9

Answer 1

The marginal 1 mote of the According to this mo law marginal value product decrease as and and more water is used becaus law of diminishing I utilite marging ding to this law, as we consume and more units of a commodity aty derived from the next unit Condumed keen on sallina, In this case, polato grower keeps on increasing the water irrigated in the field, the derved from additional water irigated keeps the ulility derived from the on falling. ans Stage 1 here begins when MPP becomes negalu This is because MPP is the ifference in the total moduct yielded by adding one mon unit of variable factar Iwater in this case). When. MPP becomes negative (TPP starts falling) means that the producer starts getting negative returns it is at this point of time that producer will not employ any factor. ans 8 $7.50 $6.00 Cost = for potatoes. for water $1390 Total Revenue = Price x Quantity $7.50 (248) + $600 (21) 248.27 because here TPP is maximum MPP is about o.) Therefore , TR= $2022 Given TC = $1390 = TR-TC = 2022-1390 = $632 per acre.