Neco 2021 Agricultural Science Question 9
Practice objective / multiple choice question 9 from the 2021 Neco Agricultural Science examination.
A farmer grows maize with fixed costs of \(\text{₦}150{,}000\) per season and a variable cost of \(\text{₦}30{,}000\) per ton produced. The market price per ton is uncertain: with 60 % probability it will be \(\text{₦}55{,}000\) and with 40 % probability it will be \(\text{₦}45{,}000\). The farmer can plant either 5 tons (low‑risk) or 8 tons (high‑risk). If production exceeds market demand, the surplus is sold at 80 % of the prevailing market price. Market demand is 6 tons when the price is \(\text{₦}55{,}000\) and 7 tons when the price is \(\text{₦}45{,}000\). Which planting level maximises the farmer's expected profit, and what is that expected profit?
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About This Question
This is Neco 2021 Agricultural Science Question 9. It is one of the objective questions from the 2021 Neco Agricultural Science examination.
Difficulty level: Hard .
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