Cost and Revenue Curves

The Cost and revenue Curve simulation suggest that John maximizes Farm Fresh Orange Juice Company’s profit by using the knowledge he has acquired over the years about cost, revenues, and their interrelationship. After being appointed Chief Operating Officers (COO) John’s operating team considered moving production to one of following states California, Texas, or Florida. Before, he made a selection he and his team weighed there opportunity cost by comparing and contrasting the citrus industry in the three states.  
Marginal and average cost curve are very similar in California, Texas and Florida, but in other southern subtropical states costs is lower. Initially, the COO thought that the optimal production site for Farm Fresh was in California, he believed that the state was primed for citrus production. However, when he and his team began researching the area, there were some-things that concerned them. Producing delicious tasting orange juice and distributing it to the masses is how F.F.O.J. makes it money, and California has some issues that may hinder production. The current state of the citrus industry, weather, and commerce, played a valuable part in the COO decision.  
California is nationally known for possessing a good citrus industry that produces over 1.6 billion dollars a year. San Diego leads the state in orange juice production, and houses the largest concentration of organic farmers in the state.   However, their citrus industry is being affected by the Asian citrus psyllid (ACP), which has ravaged orchards in Southern California. ACP is a pest that acts as a carrier or vector spreading "huanglongbing" (HLB), a devastating disease of citrus trees. This bacterial disease is transmitted to healthy trees by the psyllid after it feeds on infected plant tissue (CDFA, 2010). This particular pest, which comes from neighboring Tijuana, Mexico, is a hazard to all California citrus growers.
Weather also played a major factor in the COO’s decision. Although...