Maximizing Profit: Fertilizer and Heating Oil Strategies

This lecture discusses the economic implications of reducing fertilizer use for corn production and the costs associated with heating oil consumption in buildings. The instructor presents a case study involving a farmer who consults an agricultural engineer to assess the impact of lowering fertilizer usage on corn yield. The analysis reveals that reducing fertilizer from 6 tons to 5 tons decreases production from 60 to 58 tons. The cost of fertilizer and the selling price of corn are also considered to determine the optimal quantity of fertilizer for maximizing profit. Additionally, the lecture examines a scenario where a building owner evaluates the costs of reducing heating oil consumption. A consultant provides a table detailing the costs associated with various measures to decrease oil usage. The owner must decide which combination of measures will yield the highest profit over a 20-year period, factoring in the cost of fuel oil. The lecture emphasizes the importance of economic analysis in agricultural and energy consumption decisions.