Suppose a farmer in georgia begins to grow peaches. he uses $1,000,000 in savings to purchase land, he rents equipment for $100 comma 000100,000 a year, and he pays workers $100 comma 000100,000 in wages. in return, he produces 100 comma 000100,000 baskets of peaches per year, which sell for $3.003.00 each. suppose the interest rate on savings is 55 percent and that the farmer could otherwise have earned $25 comma 00025,000 as a shoe salesman. what is the farmer's economic profit

-$475,000

Explanation:

Total revenue = Baskets of peaches × Price

                       = 100,000 × $3

                       = $300,000

Explicit cost:

= Rent equipment + wages

= $100,000 + $100,000

= $200,000

Implicit cost:

= Land × Interest + salesman earned

=  $1,000,000 × 0.55 + $25,000

= $575,000

Total cost = Explicit cost: + Implicit cost

                = $200,000 + $575,000

                = $775,000

Economic profit = Total revenue - Total cost

                           = $300,000 - $775,000

                           = -$475,000

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