If you are losing money on your wheat farm, you should consider changing to another crop when which of the following is true:
A)when the price falls below average variable costs.
B)when the price equals costs.
C)when the price is above costs.
D)when the price equals zero profits.
E)none of the above.

Question

Quizplus · Accepted Answer

When the price falls below average variable costs, it means that the revenue generated from selling the wheat does not even cover the cost of producing it. This results in a loss of money for the wheat farmer. It would be wise to switch to another crop that has a price higher than the average variable costs to ensure profitability.

If You Are Losing Money on Your Wheat Farm, You