Subtopic: Cost analysis of implements and tractors
Question Statement:
A farmer is deciding between purchasing a tractor-drawn seed drill or hiring custom planting services at $\text{Rs. } 1500\text{ per hectare}$. Purchasing the seed drill incurs an annual fixed cost of $\text{Rs. } 36,000$, and the variable operating cost is $\text{Rs. } 600\text{ per hectare}$. The break-even annual area in hectares above which owning the drill becomes cheaper than custom hiring is ________ (answer in integer).
Answer Key:
40
Step-by-Step Solution & Explanation
Let $A$ be the break-even annual area in hectares:
$\text{Custom Hire Cost} = \text{Ownership Cost}$
$A \times 1500 = 36,000 + A \times 600$
$A (1500 - 600) = 36,000$
$A \times 900 = 36,000 \implies A = \frac{36,000}{900} = 40\text{ ha}$