Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase...

 

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Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $50,000 a year, and he pays workers $150,000 in wages. In return, he produces 250,000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 1 percent and that the farmer could otherwise have earned $35,000 as a shoe salesman. What is the farmer's economic profit? The peach farmer earns economic profit of $ (Enter your response as an integer) What is the farmer's accounting profit? The peach farmer earns accounting profit of $ (Enter your response as an integer.) Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $50,000 a year, and he pays workers $150,000 in wages. In return, he produces 250,000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 1 percent and that the farmer could otherwise have earned $35,000 as a shoe salesman. What is the farmer's economic profit? The peach farmer earns economic profit of $ (Enter your response as an integer) What is the farmer's accounting profit? The peach farmer earns accounting profit of $ (Enter your response as an integer.)

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To calculate the farmers economic profit we need to consider both explicit costs and implicit cost... View the full answer