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 total cost for switchgrass farmers is $55 per ton and the minimum average variable cost is $30 per ton,then at a price of $20 per ton in the short run the switchgrass farmer will

Question

Quizplus · Accepted Answer

The price of $20 per ton is lower than the minimum average variable cost of $30 per ton. Thus, the switchgrass farmer will not be able to cover their variable costs, let alone their fixed costs. As a result, the farmer would have to shut down and bring no switchgrass to market.

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