Carl is a farmer who goes through a farm and ranch management seminar with a heavy focus on "break even." He calculates his lowest cost of production for corn is $3.50, IF he excludes fixed costs. If Carl includes fixed costs, his lowest cost of production is $6.50/bu. The seminar leader tells Carl he should consider using his resources for a different product, but Carl replies, "nah, those fixed costs are mostly non-cash, and I like farming, so I'll continue." True or false, it is completely possible (and realistic) that Carl can produce corn indefinitely, "at a loss."
- True
- False