Refer to Figure 29

question 147

Multiple Choice

Refer to Figure 29.2 for Farmer Sanchez with a price floor set above the market price.Assume the price support is located at the minimum point on the farmer's ATC curve.If this support is eliminated, Farmer Sanchez may do all of the following except

• A) Leave the market.
• B) Reduce costs by investing in new technology.
• C) Shut down in the short run if price is below the minimum AVC.
• D) Increase production.

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Definitions:

Required Return

The smallest anticipated return that an investor looks to obtain by putting money into a certain asset, factoring in the risk entailed.

Annual Dividend

An annual dividend is the total amount of dividend payments a shareholder receives from a company in one financial year.

Constant Dividend

A dividend policy in which a company pays out a fixed amount of dividend per share irrespective of its financial performance.

Rate of Return

The profit or deficit realized on an investment over a certain time, denoted as a percentage of the investment's beginning price.