lectur24-page2

# lectur24-page2 - E(variable cost)= \$30,000/year for...

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2. Opportunity arises: You have been wanting to double your production for some time now when a neighbor tells you he has 715 acres of cropland he will rent you for \$45.00 per acre payable at harvest. (therefore no interest). E(price)= \$3.00/bu. E(output)= 100,000 bushels Total sunk cost = \$15,000/year
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Unformatted text preview: E(variable cost)= \$30,000/year for additional mach. & equip. \$32,175 rent for land \$80,000 other variable inputs, owned land \$113,935 other variable inputs, rented land E(total variable cost)= \$256,110 E(total cost)= \$271,110 ? Should we produce and sell the additional 50,000 bushels ?...
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## This note was uploaded on 12/29/2011 for the course ECO 210 taught by Professor Malls during the Fall '10 term at SUNY Stony Brook.

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