lectur8-page40 - from not choosing corn becomes our...

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Soybeans versus Corn Soybeans Corn Total Revenue: $180 $140 Look at soybeans: $140 opportunity cost $40 more revenue per acre from soybeans We have calculated the total revenue (expected price x expected yield) per acre for soybeans and corn. Let us arbitrarily choose to produce soybeans on this paper example. Once we choose soybeans to produce, the lost revenue
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Unformatted text preview: from not choosing corn becomes our opportunity cost. By taking the difference between the total revenue from soybeans and the opportunity cost (lost revenue from corn), we determine that soybeans will produce $40 more revenue per acre than corn. Should we really choose to produce soybeans, or what?...
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