Turkey farming is a perfectly competitive industry and all turkey farms have the same cost curves. When the market price is $28 a turkey, farms maximize profit by producing 700 turkeys a week. At this output, average total cost is $26 a turkey, and average variable cost is $25 a turkey. Minimum average variable cost is $18 a turkey.
If the price falls to $26 a turkey, will a turkey farm produce 700 turkeys a week?
If the price falls to $26 a turkey, a turkey farm will _______.
A. close down operations
B. produce more than 700 turkeys a week
C. stop producing until the price returns to $28 a turkey
D. continue to produce 700 turkeys a week
E. produce fewer than 700 turkeys a week