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Matt gets tired of doing an Econ PhD and decides he'd rather go start a small rutabaga farm instead, so he gets a lease on two acres of land to start growing rutabagas. The lease costs him $50,000 for a year. Unbeknownst to Matt, rutabagas are extremely fickle plants but he manages to grow 5000 total over the year. The costs of water, fertilizer, and farm hands average out to $2.00 per rutabaga. Luckily for Matt, Chris Hemsworth touts a new pure- rutabaga diet that helped him get shredded in just a few weeks, so now the demand for rutabaga is extremely high and the market price is now $14 per rutabaga. Matt should:

Matt gets tired of doing an Econ PhD and decides he'd rather go start a small rutabaga farm instead, so he gets a lease on two acres of land to start growing rutabagas. The lease costs him $50,000 for a year. Unbeknownst to Matt, rutabagas are extremely fickle plants but he manages to grow 5000 total over the year. The costs of water, fertilizer, and farm hands average out to $2.00 per rutabaga. Luckily for Matt, Chris Hemsworth touts a new pure- rutabaga diet that helped him get shredded in just a few weeks, so now the demand for rutabaga is extremely high and the market price is now $14 per rutabaga. Matt should:

Economics:
Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter22: Supply: The Costs Of Doing Business
Section: Chapter Questions
Problem 11E
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Matt gets tired of doing an Econ PhD and decides he'd rather go start a small rutabaga farm instead, so he gets a lease on two acres of land to start growing rutabagas. The lease costs him $50,000 for a year. Unbeknownst to Matt, rutabagas are extremely fickle plants but he manages to grow 5000 total over the year. The costs of water, fertilizer, and farm hands average out to $2.00 per rutabaga. Luckily for Matt, Chris Hemsworth touts a new pure- rutabaga diet that helped him get shredded in just a few weeks, so now the demand for rutabaga is extremely high and the market price is now $14 per rutabaga. Matt should: close his rutabaga farm immediately continue producing in the long run and short run continue producing in the short run but shut down in the long run raise his prices above the perfectly competitive level O lower his output
Transcribed Image Text:Matt gets tired of doing an Econ PhD and decides he'd rather go start a small rutabaga farm instead, so he gets a lease on two acres of land to start growing rutabagas. The lease costs him $50,000 for a year. Unbeknownst to Matt, rutabagas are extremely fickle plants but he manages to grow 5000 total over the year. The costs of water, fertilizer, and farm hands average out to $2.00 per rutabaga. Luckily for Matt, Chris Hemsworth touts a new pure- rutabaga diet that helped him get shredded in just a few weeks, so now the demand for rutabaga is extremely high and the market price is now $14 per rutabaga. Matt should: close his rutabaga farm immediately continue producing in the long run and short run continue producing in the short run but shut down in the long run raise his prices above the perfectly competitive level O lower his output
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