At what higher retail price point did PP Farms become financially viable within existing capacity?

Question

BlackTom AI · Accepted Answer

We start by restating the core question: At what higher retail price point did PP Farms become financially viable within existing capacity?

Option 1: $3.75/lb. — This price point might seem sufficient in some scenarios, but typically becoming financially viable within existing capacity would require a price high enough to cover fixed costs and maintain margins. If $3.75/lb. were enough, the problem wouldn’t phrase it as a higher price point, and the viability threshold would likely be lower than what the question signals. This makes it less likely to be the correct higher price point.

Option 2: $5.00/lb. — This is a relatively high price and could exceed market willingness or bracket yields under existing capacity, potentially squeezing demand or running into competitive pricing. If the business could be viable at a higher price, it would usually be at or near the threshold that balances demand with margin. Since the question asks for a higher price point “within existing capacity,” a $5.00/lb. result may overstate the price needed for viability given typical capacity constraints.

Option 3: $4.25/lb. — This figure sits between the mid-range options and is commonly the kind of break-even or viability price cited in analyses that assume steady demand and existing capacity can be leveraged without expansion. It represents a price that is high enough to generate necessary margins while staying within plausible market tolerance for a specialty or commodity product, aligning with the idea of “higher” than baseline costs but not overly optimistic.

Option 4: $4.00/lb. — This price is closer to a baseline or modest premium over cost. If the question frames $4.00 as a viable level within existing capacity, it would describe viability at a relatively conservative margin. However, calling it a “higher” price point may imply there is a more advantageous threshold beyond this, making $4.00 less likely to be the specific higher-pointspeak for viability compared to $4.25.

In summary, each option represents a plausibly different viability threshold: the lower end ($3.75) risks being too low to cover ongoing costs; the higher end ($5.00) might exceed market tolerance; $4.25/lb. sits plausibly as a viability point within current capacity without expansion; and $4.00/lb. frames viability at a more conservative level. The phrasing of the question as a “higher” price point tends to favor the middle-option interpretation over the absolute low or high extremes.

FA25-BL-BUS-M370-11927 Precision Producer Farms Case Quiz #1 (9/30/25)

At what higher retail price point did PP Farms become financially viable within existing capacity?

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