What level of profits would expect farmers to earn

Assignment Help Econometrics

Reference no: EM13239839

As of September 2011, the average price of nitrogen fertilizer in the Philippines was 1280 pesos per 50kg sack. The average price of unmilled rice at the farmgate was 15.76 pesos per kg.
N rate fertilizer 1 fertilizer 2
0 3.447 3.633
60 4.982 3.954
90 5.636 3.377
120 5.461 2.561
150 5.486 2.485
180 4.879 2.096

a. Use these prices to calculate the marginal value product of fertilizer and its cost. You can do this somewhat crudely based on the table of numbers that you compiled above, or you can do something fancier using the equations that Excel fitted to the data.

b. What do you expect to be the profit-maximizing level of fertilizer that farmers would use on each of the two rice varieties, assuming that the same fertilizer responses found in the data would still apply today? Explain.

c. How do these levels compare to the yield-maximizing levels that you found in Question 3(b)? How would you explain the difference?

d. What level of profits would you expect farmers to earn on rice production using each of these varieties?

e. Which variety would be more profitable to a farmer facing these prices?

Reference no: EM13239839

Questions Cloud

Compute the standard deviation : Calculate the Standard deviation and the relative standard deviation of these analyses. Calculate the 95% confidence limits for the mean of this data. show the calculation process

Find the initial velocity of the bag : A juggling bag is thrown straight up into the air and is caught 3 s later, What is the initial velocity of the bag

Explain what is the purity of the complex : If 27.0 mL of 0.0200 M KMnO4 were required to titrate a 0.425 g sample of K3[Fe(C2O4)3] * 3H2O, what is the % purity of the complex?

Find the acceleration of the two teams : Two teams of nine members each engage in a tug of war. The first team's members have average masses of 70 kg and exert average forces of 1350 N horizontally, What is the acceleration of the two teams

What level of profits would expect farmers to earn : Use these prices to calculate the marginal value product of fertilizer and its cost. You can do this somewhat crudely based on the table of numbers that you compiled above, or you can do something fancier using the equations that Excel fitted to t..

Explain the reaction has a dipole moment : In the reaction AH3 +H+ = AH4+, AH3 has a dipole moment and AH4+ does not. Predict the number of lone pairs that may exist on A in AH3. Hint: Find more than a single number of lone pairs that work.

How does the firm have increasing returns to scale : For a firm in a perfectly competitive market that faces a market price of $5/unit for its output, draw a diagram showing a U-shaped long run Average Cost curve and the related Marginal Cost curve so that, in the situation you show

Explain what was the origional nuclide : An unknown nuclide decays by elimination of 2 alpha particles followed by a positron. Bombarding this decay product with a 6Li nucleide creates the single nuclide Pb-207. What was the origional nuclide

How does the market price change and what happens to profits : A firm in a perfectly competitive industry is making losses in the short run. (i) Sketch a ‘typical' firm's Average Cost and Marginal Cost curves and in the diagram show a possible price at which the firm would produce in the short run, but make l..

User Account

All Pages