Refer to Figure 29.2 for Farmer Sanchez with a price floor set above the market price. Assume the price support is located at the minimum point on the farmer's ATC curve. If this support is eliminated, Farmer Sanchez may do all of the following except
A) Leave the market.
B) Reduce costs by investing in new technology.
C) Shut down in the short run if price is below the minimum AVC.
D) Increase production.

Question

Refer to Figure 29.2 for Farmer Sanchez with a price floor set above the market price. Assume the price support is located at the minimum point on the farmer's ATC curve. If this support is eliminated, Farmer Sanchez may do all of the following except
A) Leave the market. 
B) Reduce costs by investing in new technology. 
C) Shut down in the short run if price is below the minimum AVC. 
D) Increase production.

Quizplus · Accepted Answer

The Answer of  Refer to Figure 29.2 for Farmer Sanchez with a price floor set above the market price. Assume the price support is located at the minimum point on the farmer's ATC curve. If this support is eliminated, Farmer Sanchez may do all of the following except
A) Leave the market. 
B) Reduce costs by investing in new technology. 
C) Shut down in the short run if price is below the minimum AVC. 
D) Increase production.