Farmer Jones grows sugar. The total revenue, marginal revenue, total cost, and marginal cost of producing various quantities of sugar (bushels in 1000s) are presented in the table below. Total Revenue Output (bushels in 1000s) Marginal Revenue Total Cost 0 1 2 3 4 5 6 SO 150 300 450 600 750 900 150 150 150 150 150 150 Suppose the market for sugar is perfectly competitive. To maximize profits, farmer Jones should produce At that level of output, farmer Jones will earn profit of $ 0 0 120 200 240 320 480 680 Marginal Cost - 120 80 40 80 160 200 thousand bushels of sugar. (Enter a numeric response using an integer.)

Farmer Jones grows sugar. The total revenue, marginal revenue, total cost, and marginal cost of producing various quantities of sugar (bushels in 1000s) are presented in the table below. Total Revenue Output (bushels in 1000s) Marginal Revenue Total Cost 0 1 2 3 4 5 6 SO 150 300 450 600 750 900 150 150 150 150 150 150 Suppose the market for sugar is perfectly competitive. To maximize profits, farmer Jones should produce At that level of output, farmer Jones will earn profit of $ 0 0 120 200 240 320 480 680 Marginal Cost - 120 80 40 80 160 200 thousand bushels of sugar. (Enter a numeric response using an integer.)

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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**Farmer Jones' Sugar Production Analysis**

Farmer Jones grows sugar. The table below presents the total revenue, marginal revenue, total cost, and marginal cost of producing various quantities of sugar, measured in thousands of bushels.

| Output (bushels in 1000s) | Total Revenue ($) | Marginal Revenue ($) | Total Cost ($) | Marginal Cost ($) |
|-------------------------|-----------------|---------------------|---------------|-----------------|
| 0 | 0 | - | 0 | - |
| 1 | 150 | 150 | 120 | 120 |
| 2 | 300 | 150 | 200 | 80 |
| 3 | 450 | 150 | 240 | 40 |
| 4 | 600 | 150 | 320 | 80 |
| 5 | 750 | 150 | 480 | 160 |
| 6 | 900 | 150 | 680 | 200 |

**Instructions:**

- Suppose the market for sugar is perfectly competitive. To maximize profits, Farmer Jones should produce ___ thousand bushels of sugar. (Enter a numeric response using an integer.)

- At that level of output, Farmer Jones will earn a profit of $ ___.

**Analysis:**

1. **Marginal Analysis**:
- To find the profit-maximizing output level, compare marginal revenue with marginal cost. Produce until marginal cost equals marginal revenue.

2. **Profit Calculation**:
- Profit is calculated as Total Revenue minus Total Cost for the chosen output level.

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