With fixed costs of $80 per acre, variable costs of $120 per acre, and price of $4 per bushel, the break-even yield per acre is:

With fixed costs of $80 per acre, variable costs of $120 per acre, and price of $4 per bushel, the break-even yield per acre is:

• A. 50 bushels per acre
• B. 40 bushels per acre
• C. 60 bushels per acre
• D. 70 bushels per acre

Answer: (A)

At break-even, revenue covers all costs. Total costs per acre come from fixed plus variable costs: eighty dollars plus one hundred twenty dollars, which together are two hundred dollars. With a price of four dollars per bushel, revenue per acre equals four dollars times the yield. Setting revenue equal to costs gives four dollars times the yield = two hundred dollars. Solving for yield, yield = two hundred dollars divided by four dollars per bushel, which is fifty bushels per acre. So the break-even yield is fifty bushels per acre. If yield is higher than that, profit; if lower, a loss.

At break-even, revenue covers all costs. Total costs per acre come from fixed plus variable costs: eighty dollars plus one hundred twenty dollars, which together are two hundred dollars. With a price of four dollars per bushel, revenue per acre equals four dollars times the yield. Setting revenue equal to costs gives four dollars times the yield = two hundred dollars. Solving for yield, yield = two hundred dollars divided by four dollars per bushel, which is fifty bushels per acre. So the break-even yield is fifty bushels per acre. If yield is higher than that, profit; if lower, a loss.