The farmer produces 119 bushels of wheat at a total cost of $3 per bushel. He sells all of the wheat to Firm F for $5 per bushel. Firm F produces 51 pounds of flour from the wheat at a total cost of $6 per pound (including the amount paid to the farmer for the wheat). Firm F sells 45 pounds of flour to consumers for $10 per pound. There are no other firms in this simple economy. In total, how much profit do the farmer and Firm F earn? Enter a whole number with no dollar sign.

Question

Erick Goodwin

Business

14 December, 02:26

The farmer produces 119 bushels of wheat at a total cost of $3 per bushel. He sells all of the wheat to Firm F for $5 per bushel. Firm F produces 51 pounds of flour from the wheat at a total cost of $6 per pound (including the amount paid to the farmer for the wheat). Firm F sells 45 pounds of flour to consumers for $10 per pound. There are no other firms in this simple economy. In total, how much profit do the farmer and Firm F earn? Enter a whole number with no dollar sign.

+2

Answers (1)

Know the Answer?

Grant Walker · Answer 1

Farmer:

Total cost of production of farmer = number of bushel * cost of per bushel

= 119 * $3

= $357

Total revenue of farmer = price * quantity sold

= $5 * 119

= $595

Total profit of farmer = Total revenue - Total cost

= 595 - 357

= 238

Firm F:

Total cost of production of firm F = pounds of flour * cost of per pound

= 51 * $6

= 306

Total revenue of firm F = price * quantity sold

= $10 * 45

= 450

Total profit of Firm F = Total revenue - Total cost

= 450 - 306

= 144