Equal Marginal Principle and Production Economic Analysis

1
Equal Marginal Principle and Production Economic
Analysis

• Price of water 8.00 per acre-inch
• Price of wheat 3.50 per bushel
• Fixed costs 50.00 per acre

• Estimating the TPP, APP, MPP, TVP(TR), AVP, MVP
  and profit.

2

• Water 8/ac.-in., Wheat 3.50/bu., Fixed
  costs 50/ac.

What is the HPP?
Bushels of wheat and profit
3

• Water 8/ac.-in., Wheat 3.50/bu., Fixed
  costs 50/ac.

What is the HPP?
Bushels of wheat and profit
4

• Water 8/ac.-in., Wheat 3.50/bu., Fixed
  costs 50/ac.

What is the HPP?
Bushels of wheat and profit
5

• Water 8/ac.-in., Wheat 3.50/bu., Fixed
  costs 50/ac.

What is the HPP?
Bushels of wheat and profit
6

• Water 8/ac.-in., Wheat 3.50/bu., Fixed
  costs 50/ac.

What is the HPP?
Bushels of wheat and profit
7

• Water 8/ac.-in., Wheat 3.50/bu., Fixed
  costs 50/ac.

What is the HPP?
Bushels of wheat and profit
8

• Water 8/ac.-in., Wheat 3.50/bu., Fixed
  costs 50/ac.

What is the HPP?
Bushels of wheat and profit
9

• Water 8/ac.-in., Wheat 3.50/bu., Fixed
  costs 50/ac.

What is the HPP?
Bushels of wheat and profit
10

• Water 8/ac.-in., Wheat 3.50/bu., Fixed
  costs 50/ac.

Bushels of wheat
What is the HPP?
10 units of water
58
TR TC
Profit
(58)(3.50) (10)(8) 50
203 130 73