Question

in the summer, you grow tomatoes and sell them at a local farmers market for S015 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 tomatoęs y compost. Then compute the additional revenue (or marginal benefitlfrom each additional pound of compost. Enter y ou are able to grow by using each additional pound of the table below, rounding the marginal benefit of each pound of compost to two decimal places. our responses in Pounds of Pounds of pounds of 120 125 128 130 131 131.5 If compost costs s0.40 per pound and your goal is to make as much profit as possible, how many pounds of compost should you add? You should add pounds of compost

Answer 1

we got this by subtracting additional quantity of tomatoes from previous quantity Got this by multiplying price with additional pounds of tomatoes (A) times price If composite is for $0.4 then we can max profit where additional benefit is more than additional cost (which is $0.4) i.e. at compost quantity 1 we can still increase profit as MR > MC so for 2 pounds of composite But if we go beyond 3 pounds we will we fall in profits So we should add 3 pounds of composite that gives us $18 of profit.