a-dairy-farmer-in-a-perfectly-competitive-market-notices-that-the-market-price-h

Question

A dairy farmer in a perfectly competitive market notices that the market price has fallen below his average total cost. What should the farmer consider doing in the short run?

Accepted Answer

Continue producing if price covers average variable cost.

Answer

Raise prices to cover costs.

Answer

Immediately exit the market.

Answer

Increase production to lower average total cost.