Suppose a farmer in Georgia begins to grow peaches. He uses​ $1,000,000 in savings to purchase​ land, he rents equipment

Suppose a farmer in Georgia begins to grow peaches. He uses​ $1,000,000 in savings to purchase​ land, he rents equipment for ​$70,000 a​ year, and he pays workers ​$100,000 in wages. In​ return, he produces baskets of peaches per​ year, which sell for ​$3.00 each. Suppose the interest rate on savings is 4 percent and that the farmer could otherwise have earned ​$25,000 as a shoe salesman. What is the​ farmer’s economic​ profit?

Leave a Reply

Your email address will not be published.