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 variable cost for switchgrass farmers is $40 per ton and the current price is $35 per ton, in the long run the switchgrass farmer will

Question

Quizplus · Accepted Answer

If the current price is below the minimum average variable cost, the farmer will not be able to cover their variable costs and will continuously lose money. In the long run, the farmer will have to exit the industry to avoid further losses.

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