Suppose that you own a 10acre plot of land that you would like to rent out to
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Suppose that you own a 10‐acre plot of land that you would like to rent out to wheat farmers. For them, bringing in a harvest involves $30 per acre for seed, $80 per acre for fertilizer, and $70 per acre for equipment rentals and labor. With these inputs, the land will yield 40 bushels of wheat per acre. If the price at which wheat can be sold is $5 per bushel and if farmers want to earn a normal profit of $10 per acre, what is the most that any farmer would pay to rent your 10 acres? What if the price of wheat rose to $6 per bushel?
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Microeconomics Principles, Problems and Policies
ISBN: 978-1259450242
20th edition
Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn
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