You are an economic consultant for Farmer Perk, who produces raw cotton. One day he gives you the following cost data. The market price for a pound of cotton is $7. Use the table to answer the following questions.
(pounds of cotton per day) Fixed cost
(FC) Variable cost
0 $12 $0
1 $12 $5
2 $12 $9
3 $12 $14
4 $12 $20
5 $12 $28
6 $12 $38
7.3. At the current market price, Farmer Perk will:
A. Produce in the short run and shut down in the long run.
B. Shut down in the short run and shut down in the long run.
C. Produce in the short run and produce in the long run.
D. Shut down in the short run and produce in the long run.
Dear student ======================= The profit maximizing level of output would be upto the point where MR is mor than MC.... View the full answer