A farmer has 500 acres on which he has previously grown corn.His yield per acre is 100 bushels of corn.If his production flexibility contract payment is $21,250,then what is the corn payment rate?

Question

Quizplus · Accepted Answer

The formula to calculate the payment rate is:

Payment rate = (Payment / Yield) * Base Price

In this case, we know the farmer's yield is 100 bushels per acre, and he has 500 acres. So his total yield is:

Total yield = 100 bushels/acre * 500 acres = 50,000 bushels

We also know the payment is $21,250.

To calculate the payment rate, we need to know the base price. Unfortunately, the question does not give us the base price. So we cannot calculate the payment rate exactly.

However, we can estimate the payment rate based on typical base prices for corn. According to the USDA, the average base price for corn in 2019 was $3.56 per bushel.

If we use this base price, we can calculate the payment rate:

Payment rate = ($21,250 / 50,000 bushels) * $3.56/bushel = $0.50/bushel

Therefore, the best answer is C.

A Farmer Has 500 Acres on Which He Has Previously