The owner of a greenhouse and nursery is considering whether to spend $12,000 to acquire the licensing rights to grow a new variety of rose bush,which she could then sell for $8 each.Variable costs would be $5 per rosebush. If her available land has design and effective capacities of 3,000 and 2,000 rose bushes per year respectively,and she plans to grow 1,200 rosebushes each year on this land,what will be the efficiency of her use of this land?

Question

Quizplus · Accepted Answer

Efficiency is calculated as the ratio of actual output to effective capacity. Here, the actual output is 1,200 rose bushes, and the effective capacity is 2,000 rose bushes. Therefore, efficiency = (1,200 / 2,000) * 100% = 60%.

The Owner of a Greenhouse and Nursery Is Considering Whether