Chapter 11
The figure shows that growing the
first bushel of wheat is profitable. It costs Jonathan $1 to
grow this bushel (from the marginal cost line) and Jonathan
sells the bushel for $4 (from the marginal revenue line).
Hence this bushel of wheat yields Jonathan a profit of $3 and
the blue arrow in the figure shows Jonathan's $3 profit on
this bushel of wheat. So, if Jonathan grows one bushel of
wheat, he makes a profit of $3 on this bushel and so has a
total profit of $3.
Jonathan grows the first bushel of wheat, because it is a profitable bushel. However, what about a second bushel: Does Jonathan grow it, too? To find out, click on the icon below.
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