Suppose a farmer planted 1,000 acres of corn.
The cost of the corn seed for the entire 1,000 acres was $500
Fuel costs for equipment do plant was $750
Other preparatory chemicals cost $250
Capital depreciation for equipment used in the time period was $2,500
Now assume that the rains came at the perfect times and besides the normal herbicides that he would need to apply, he would have to do very little and he was on track to yield a nice crop worth $50,000
Now lets say a competing farmer nearby plowed his entire field up one night. This was just before the corn was about to sprout but it ruined his entire crop.
Should the farmer collect...
A) The cost of seed and act of planting the crop ($4,000)
B) The cost of the seed only ($500)
C) The cost of what the crop would have been worth ($50,000)
D) The cost of everything ($54,000)
E) None of the above
There is no right or wrong answer, please provide your rational for the anwer you pick and then check back after I have chosen the best answer for a follow up question.
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