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Suppose that half of the cost of producing wheat

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Suppose that half of the cost of producing wheat is the rental cost of land (a fixed cost) and half is the cost of labor and machines (a variable cost). If the average total cost of producing wheat is $8 and the price of wheat is $6, what would you advise the farmer to do? (?Grow something else? is not an acceptable response;also, assume all price and cost data cannot be altered.)

 

Paper#24272 | Written in 18-Jul-2015

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