A grain farm can produce corn yielding 150 bushels per acre at a total cost of $300 per acre. If corn sells for $2.00 per bushel, what is the net return per acre for the corn crop?

A grain farm can produce corn yielding 150 bushels per acre at a total cost of $300 per acre. If corn sells for $2.00 per bushel, what is the net return per acre for the corn crop?

• A. -$50
• B. $0
• C. $50
• D. $200

Answer: (B)

Net return is what you have left after covering all costs, so you compare revenue to costs. Revenue from the corn per acre is yield times price: 150 bushels × $2.00 = $300. Costs per acre are $300. Net return = $300 − $300 = $0 per acre. So the crop breaks even. The choice showing $0 is the best fit.

Net return is what you have left after covering all costs, so you compare revenue to costs. Revenue from the corn per acre is yield times price: 150 bushels × $2.00 = $300. Costs per acre are $300. Net return = $300 − $300 = $0 per acre. So the crop breaks even. The choice showing $0 is the best fit.