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 of 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:

Question

Quizplus · Accepted Answer

In the long run, if the price is below the minimum average variable cost, the farmer cannot cover the variable costs and will exit the industry.

Recall the Application About the Break-Even Price for Growing Switchgrass