Purchases nitrate and phosphate fertilizers to produce wheat

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A farmer purchases nitrate and phosphate fertilizers to produce wheat. The farmer decides to produce a given level of output by using the most efficient or least costly combination of the two fertilizers. The price of nitrate is 80 cents per pound and the price of phosphate is 50 cents per pound. Moreover, the farmer chooses an input combination such that the marginal productivity of a pound of nitrate is 8 (bushels of wheat) and the marginal productivity of a pound of phosphate is 4 (bushels of wheat). Which of the following should the farmer buy?

a. More nitrate and more phosphate.

b. Less nitrate and more phosphate.

c. Less nitrate and less phosphate.

d. More nitrate and less phosphate.

e. There is no need to buy more (or less) of either input; the current combination of nitrate and phosphate is optimal.

Reference no: EM132492254

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