For a perfectly competitive beef farmer, if the price does not change, an economic profit could turn into an economic loss if the

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Quizplus · Accepted Answer

If the average total cost curve shifts upward, this means the costs of production have increased, potentially due to factors such as higher feed prices or labor costs. If the price of beef does not increase to compensate for these higher costs, the farmer's economic profit could turn into a loss. Option A is incorrect because a decrease in fixed costs would have a minimal impact on the average total cost curve. Option B is incorrect because if the average total cost curve does not change, the farmer would continue to earn the same profit as before. Option D is incorrect because a downward shift in the average total cost curve would indicate lower costs, potentially leading to even higher profits. Option E is also incorrect because while a lower marginal cost curve could lead to greater efficiency in production, it would not necessarily affect the overall profitability of the farmer.

For a Perfectly Competitive Beef Farmer, If the Price Does