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Answer :
If the price of a turkey falls to $57, the turkey farmer will shut down as they would be unable to cover their variable costs. This decision is based on the fact that the price is equal to the minimum average variable cost.Therefore, the correct answer is A. Shut down.
The question states that turkey farming is a perfectly competitive industry and all turkey farms have the same cost curves.
It also mentions that the minimum average variable cost of producing a turkey is $57.
If the price of a turkey falls to $57, the turkey farmer will face a situation where the price is equal to the minimum average variable cost.
In this case, the turkey farmer will not be able to cover their variable costs, meaning they would be making a loss on each turkey produced.
In a perfectly competitive market, if a firm is unable to cover its variable costs, it should shut down in the short run.
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