Gce Model Questions Vol1 2021 Agricultural Science Question 25
Practice objective / multiple choice question 25 from the 2021 Gce Model Questions Vol1 Agricultural Science examination.
A farmer intends to grow maize on 5 ha. Fixed costs (land rent, machinery, etc.) are ₦150 000 per ha. Variable cost is ₦30 000 per tonne of maize produced. Expected yield is 4 t ha⁻¹. The expected market price is ₦45 000 per tonne, but there is a 10 % probability that the price will fall to ₦35 000 per tonne because of market fluctuations. (a) Calculate the break‑even price per tonne of maize. (b) Determine the expected profit (or loss) without any additional investment. (c) The farmer can invest in a storage facility costing ₦200 000 that guarantees the price of ₦45 000 t⁻¹ (no price drop). Should the farmer purchase the storage facility? Justify your answer using expected‑value analysis.
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About This Question
This is Gce Model Questions Vol1 2021 Agricultural Science Question 25. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Agricultural Science examination.
Difficulty level: Hard .
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