For large farms to be as productive as they can be, their owners need to invest heavily in expensive machinery. This typically requires them to go into considerable debt, and interest on this debt is then a significant fixed cost. This high fixed cost makes those farmers vulnerable to operating losses if the price of their products drop.
A. They can be highly productive without being profitable.
B. They tend to be so highly productive that they drive down market prices.
C. They tend to be consistenly profitable if their owners borrow at low interest rates.
D. They respond to opearting losses by increasing their productivity.
E. They can not be profitable if their owners depend on credit
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E.
They can not be profitable if their owners depend on credit
Explanation:
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