Figure 8.4.2
-Refer to Figure 8.4.2 above. If the farm produces 14 sacks of coffee when market price is $380,
A) the farmer does not earn any profit.
B) the farmer has maximized his profit.
C) the farmer has lost an opportunity for additional profit.
D) the farmer should reduce the number of sacks produced in order to increase his profit.

Question

Figure 8.4.2
-Refer to Figure 8.4.2 above. If the farm produces 14 sacks of coffee when market price is $380,
A) the farmer does not earn any profit. 
B) the farmer has maximized his profit. 
C) the farmer has lost an opportunity for additional profit. 
D) the farmer should reduce the number of sacks produced in order to increase his profit.

Quizplus · Accepted Answer

Without seeing Figure 8.4.2, we can infer that if producing 14 sacks of coffee at a market price of $380 leads to a situation where the farmer has lost an opportunity for additional profit, it suggests that at this production level, the farmer is not operating at the most efficient point. This could mean that the marginal cost of producing coffee is less than the marginal revenue (price) at 14 sacks, indicating that producing more could increase profit.

Figure 8.4.2 -Refer to Figure 8.4.2 Above. If the Farm Produces 14