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A farmer has developed a new type of fertilizer. This new fertilizer costs 20 percent more to produce than the old fertilizer but has better results: The same land now produces 25 percent more crops each year.

Which statement best describes one way the farm will be affected by using this new fertilizer?

A. The farm's opportunity cost for each piece of land will increase.
B. The farm's opportunity cost for each piece of land will decrease.
C. The farm's marginal benefits for each piece of land will decrease.
D. The farm's marginal benefits for each piece of land will increase.

Sagot :

Final answer:

Using the new fertilizer will increase marginal benefits for the farmer's land.


Explanation:

Marginal benefits for each piece of land will increase when using the new fertilizer compared to the old one. The new fertilizer leads to a 25 percent increase in crop production, resulting in higher revenue for the farmer. This increase in revenue offsets the 20 percent increase in production costs. Therefore, the farmer will experience a positive impact from using the new fertilizer.


Learn more about Fertilizer impact on farm revenue