Problem 1: please show all work for all parts please. Problem 1A grape grower with a vineyard in the Edna Valley and in the Carneros appellation inSonoma/Napa has a contract to produce 18 tons of pinot noir grapes for Gallo. The currentallocation of the 18 tons results in a marginal cost of production in the Edna Valley vineyard of$800 (MCEV = $800) and a marginal cost of production in the Carneros vineyard of $1200 (MCC= $1200). Explain whether the grower should move one ton of production from the Edna Valleyto Carneros or vice versa. Make sure to provide a clear explanation of the outcome consistentwith the idea of the equimarginal principle. Make sure to use the correct terms and units.

The cost that a firm incurs when it has to produce extra units of any goods or services is referred…

A grape grower with a vineyard in the Edna Valley and in the Carneros appellation in Sonoma/Napa has a contract to produce 18 tons of pinot noir grapes for Gallo. The current allocation of the 18 tons results in a marginal cost of production in the Edna Valley vineyard of $800 (MCV = $800) and a marginal cost of production in the Carneros vineyard of $1200 (MCC = $1200). Explain whether the grower should move one ton of production from the Edna Valley to Carneros or vice versa. Make sure to provide a clear explanation of the outcome consistent with the idea of the equimarginal principle. Make sure to use the correct terms and units.

A grape grower with a vineyard in the Edna Valley and in the Carneros appellation in Sonoma/Napa has a contract to produce 18 tons of pinot noir grapes for Gallo. The current allocation of the 18 tons results in a marginal cost of production in the Edna Valley vineyard of $800 (MCV = $800) and a marginal cost of production in the Carneros vineyard of $1200 (MCC = $1200). Explain whether the grower should move one ton of production from the Edna Valley to Carneros or vice versa. Make sure to provide a clear explanation of the outcome consistent with the idea of the equimarginal principle. Make sure to use the correct terms and units.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter11: Price And Output Determination: Monopoly And Dominant Firms

Section: Chapter Questions

Problem 6E

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