| Suppose farmers with apple orchards left their apples on the ground to rot one fall rather than sell them in the market. This behaviour could most likely be explained by ____ |
| | | A. the rising marginal cost of growing apples | | | B. farmers making an exit decision to recover the fixed cost of growing apples | | | C. farmers making a shut-down decision to save the variable cost of transporting apples to market | | | D. irrational behaviour of apple farmers | |
| Suppose farmers with apple orchards left their apples on the ground to rot one fall rather than sell them in the market. This behaviour could most likely be explained by ____ |
| | | A. the rising marginal cost of growing apples | | | B. farmers making an exit decision to recover the fixed cost of growing apples | | | C. farmers making a shut-down decision to save the variable cost of transporting apples to market | | | D. irrational behaviour of apple farmers | |
Increasing Marginal cost is associated with the producing each additional product are growing. Shut down decision is a short term phenomenon. After some time the farmer can start selling the apples. So, he will not let the apple to rot. Exit decision also does not match with this statement. The statement expresses the irrational behavior of the farmer. Only irrational behavior can allow the farmers to leave their apples to rot rather than to sell in the market.
So, the right answer is option D.
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