Farmer Jones Is Producing Wheat and Must Accept the Market

Multiple Choice

Farmer Jones is producing wheat and must accept the market price of $6.00 per bushel. At this time, her average total costs and her marginal costs both equal $8.00 per bushel. Her average variable costs are $5 per bushel. In order to maximize profits or minimize losses in the short run, farmer Jones should

A) increase output.
B) increase selling price.
C) produce zero output and close down.
D) continue producing, but reduce output.