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Take a Test- Lexis Fuller-Google Chrome Secure https//www.mathxl.com/Student/PlayerTest.aspx?testld-1688195838centerwin-yes Microeconomics Fall 17 uiz: Quiz #9 Submit his Question: 1pt 11 of 16 (5 complete) > This Quiz: 16 pts po: Question Help Farmer Brown grows strawberries. The average total cost average variable cost, and marginal cost of growing strawberries for an ndividual farmer are ustrated in the graph to the right Farmer Brown will incur losses if the market price fails below (Entera num enc response using an/nteger) Furthermore, farmer Brown should shut down in the short run 2.MC per crate ifthe market price falls below S per crate Quantity of stra berces crates per ie 408 PM

Explanation / Answer

The farmer will incur losses if price is below min. Point of ATC . So, if the market price falls below $26( price at the min point of ATC) the farmer will make losses.

Short run shut down condition for a perfectly competitive firm is : price < min AVC i.e. when price falls below minimum Point of AVC the firm should shut down. Here farmer Brown should shut down if the price falls below $22 (price at the minimum Point of AVC) per crate .

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