Happy Cows is a dairy farm that is currently earning $5,000 in economic profit. The managers of Happy Cows are considering adding a second dairy farm; however, the managerial diseconomies from adding the second farm cause Happy Cows current farm's economic profit to fall to $3,000. It is economically sound for Happy Cows to add the second farm if ______.
A) the second farm's economic profit is at least $1,750
B) the second farm's economic profit is less than $2,000
C) the second farm's economic profit is at least $1,500
D) the second farm's economic profit exceeds $2,000
Correct Answer:
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