Panther Acre Cattle Company - Chapter 7 Lab A typical farm or ranch problem is determining the optimum or profit-maximizing weight to sell fed cattle. Assume the feeder cattle are purchased at 600 pounds. The feed required and the weight gain is shown in the table below. Feed costs 7¢ per pound and feeder cattle prices are as follows: Weight go to 3rd deciment Price per Pound 600-899 lbs 72¢ 900-1099 lbs 70¢ 1100 lbs or more 67¢ Pay attention to the price changes when computing MVP. Input Output Feed Weight Selling Required Gain Weight Total Average Marginal Marginal Marginal Revenue Physical Physical Value Input (lbs) (lbs) (lbs) Product Product Product Cost 0 0 600 432 XXX 500 50 So 650 468 0.10 XXX 0.083 XXX XXX 1,100 145 as 745 536.40 0.132 6.158 1,700 235 ao 835 601.20 0.138 0.15 2,300 320 85 920 644 0.139 2,900 400 80 1,000 700 0.138 3,500 465 65 1,065 745. SO 0.133 4,100 525 60 1,125 753.75 0.128 4,700 575 SO 1,175 787.25 0.122 5,300 615 D 1,215 814.05 0.116 5,900 645 30 1,245 834.15 0.109 1. What is the profit-maximizing weight at which to sell fed cattle? 2. If feed costs 10¢ per pound, what would be the profit-maximizing weight? 3. How necessary was it to calculate APP to answer these questions?

Panther Acre Cattle Company - Chapter 7 Lab A typical farm or ranch problem is determining the optimum or profit-maximizing weight to sell fed cattle. Assume the feeder cattle are purchased at 600 pounds. The feed required and the weight gain is shown in the table below. Feed costs 7¢ per pound and feeder cattle prices are as follows: Weight go to 3rd deciment Price per Pound 600-899 lbs 72¢ 900-1099 lbs 70¢ 1100 lbs or more 67¢ Pay attention to the price changes when computing MVP. Input Output Feed Weight Selling Required Gain Weight Total Average Marginal Marginal Marginal Revenue Physical Physical Value Input (lbs) (lbs) (lbs) Product Product Product Cost 0 0 600 432 XXX 500 50 So 650 468 0.10 XXX 0.083 XXX XXX 1,100 145 as 745 536.40 0.132 6.158 1,700 235 ao 835 601.20 0.138 0.15 2,300 320 85 920 644 0.139 2,900 400 80 1,000 700 0.138 3,500 465 65 1,065 745. SO 0.133 4,100 525 60 1,125 753.75 0.128 4,700 575 SO 1,175 787.25 0.122 5,300 615 D 1,215 814.05 0.116 5,900 645 30 1,245 834.15 0.109 1. What is the profit-maximizing weight at which to sell fed cattle? 2. If feed costs 10¢ per pound, what would be the profit-maximizing weight? 3. How necessary was it to calculate APP to answer these questions?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 4.2IP

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