If Corn and Milo are perfect substitutes for chicken feed, which should a cost minimizing producer use if corn is $0.10/lb and milo is $0.08/lb?

In a situation where corn and milo are perfect substitutes for chicken feed, a cost-minimizing producer will choose the feed option that is less expensive per pound. In this case, the cost of corn is $0.10 per pound, while milo is cheaper at $0.08 per pound.

To minimize costs, the optimal strategy is to use the feed that provides the same benefits at a lower price. Since milo has a lower price, the producer should exclusively use milo to achieve the lowest possible feed costs without impacting the quality or nutritional value necessary for feeding chickens effectively. Therefore, the best choice for a cost-minimizing producer is to utilize only milo.

The other options suggest mixing the two feeds or choosing the more expensive option, which would not align with the goal of reducing feed costs. By opting for milo exclusively, the producer ensures that they are maximizing their efficiency and minimizing unnecessary expenditures for chicken feed.