1. Think Break #9 (Review)
Steers
Beef MP
VMP 10 72
7.2
648 20
148
7.6
684 30
225
7.7
693 40
295
7.0
630 50
360
6.5 60
420
6.0 70
475
5.5 80
525
5.0
450 90
570
4.5
405
100
610
4.0
How many steers should you stock if the expected selling price is $90/cwt and steers cost $495 each?
Hint: What’s the single input optimality condition?

2. Think Break #9 Answer
Steers
Beef MP
VMP 10 72
7.2
648 20
148
7.6
684 30
225
7.7
693 40
295
7.0
630 50
360
6.5
585 60
420
6.0
540 70
475
5.5
495 80
525
5.0
450 90
570
4.5
405
100
610
4.0
How many steers should you stock if the expected selling price is $90/cwt and steers cost $495 each?
Answer: 70 steers, since an additional steer costs $495, which equals the value of the marginal product generated by the added steer (rx = VMPx)