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Think Break #2

This exercise involves calculating the value of marginal product (VMP) for corn by inputting the corn price at $2 per bushel into the provided table. Using the formula VMP = price × marginal product (MP), you’ll analyze the profit-maximizing rate of nitrogen (N) fertilizer when the price of N fertilizer is $0.20 per pound. Determine the optimal application rate of N fertilizer that maximizes profit while considering the current market conditions.

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Think Break #2

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  1. Think Break #2 • Fill in the VMP column in the table using $2/bu for the corn price. • What is the profit maximizing N fertilizer rate if the N fertilizer price is $0.2/lb?

  2. Think Break #2: Answer • Fill in the VMP column in the table using $2/bu for the corn price. VMP = p x MP • What is the profit maximizing N fertilizer rate if the N fertilizer price is $0.2/lb? Where VMP = r = 0.2

  3. Think Break #2: Answer

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