-Based on the Table Above Which Shows Chip's Costs, If

question 23

Multiple Choice

-Based on the table above which shows Chip's costs, if rice sells for $600 a ton, Chip will

• A) shut down because he incurs an economic loss.
• B) shut down because the price is below his minimum average variable cost.
• C) stay open because he makes an economic profit.
• D) stay open because the price is above his minimum average variable cost.

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Definitions:

Farm Products

Agricultural commodities that include a variety of food items, raw materials, and livestock produced by farming activities.

Food Products

Processed farm commodities sold through grocery stores and restaurants. Examples include bread, meat, fish, chicken, pork, lettuce, peanut butter, and breakfast cereal.

Markets

Places or systems where goods and services are exchanged.

Price Elasticity

An indicator showing the reaction of consumer demand for a product to shifts in its price, illustrating how price fluctuations affect buyer sensitivity.