Question: This problem continues the previous problem, so use information given in problem 1. You decide to also look at the economic problem from the output/cost side. In addition to the costs described in the previous problem, you have a Fixed Cost of $1000 for property taxes, fence maintenance, and pasture care that you must pay no matter how many steers you buy. Fill in the table below and answer the following questions. Note that the "Lbs Beef Produced" column should be used from the table you made in problem 1.

1. At a price of $225/cwt, what is the economically optimal amount of beef to produce?
   How many steers do you need to buy and put on the pasture to produce this amount of beef? How do you answers change if the price is $230/cwt? How do you answers compare to those in problem 1?
2. With a price of $220/cwt, if you produce the economically optimal amount of beef, how much profit (= price x beef – total cost) will you make?
3. You should have gotten a negative profit in part b. Why is it economically optimal to buy steers and put them on the pasture, even if you are going to earn a negative profit?

(Hint: what’s your profit if you put no steers on the pasture?)

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document