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 $40 per ton, then at a price of $35 per ton in the short run the switchgrass farmer will

Question

Quizplus · Accepted Answer

If the price per ton is below the minimum average variable cost, the farmer will not be able to cover their variable costs and will operate at a loss. Therefore, it would not be profitable for the farmer to bring switchgrass to the market at a price of $35 per ton and they would shut down.

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