What is the profit-maximizing level of chemical use? ?
Explain why the farmer, being rational, should not use one less or one more ounce of chemicals than your stated profit-maximizing level. This is for a Agricultural Economics course
- OiyLv 64 weeks ago
It’s the level of output which the cost is minimized. So if he uses more chemical to increase output, the cost will get higher, or vice versa.
- JuanBLv 74 weeks ago
Because such people like to maximize profit!!!! If his only objective is to make money, then he'd use the amount of chemicals that makes the most money.
You have to change up the situation to use less. Fines on chemical use, fees on chemical sales, be willing to pay more for chemical free products... anything to internalize his externalities. Or you could picket his farm and yell at him for the chemicals, and make his life hell so profit maximizing isn't his only objective.