Recall the Application about the break-even price for growing switchgrass, a perennial grass that is native to the U.S. plains states and is used to create biofuel, to answer the following question(s).Recall the Application. If the minimum average variable cost for switchgrass farmers is $40 per ton and the current price is $35 per ton, in the long run the switchgrass farmer will:

A. exit the industry.
B. operate and lose money.
C. make a positive economic profit.
D. make a zero economic profit.


Answer: A

Economics

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