Question

Dairy farmers in the United States have been paying higher prices each year for essential components of production, such as feed for the cattle, fuel for farm equipment, and electricity for lights and machinery. At the same time, the amount the farmer receives for the milk, while fluctuating at times, is essentially the same as it was five years ago when the components of production were much less expensive. Many dairy farmers were just able to make a profit five years ago.The statements above, if true, most strongly support which of the following conclusions?A)Unless they have found other ways to cut expenses, some dairy farmers are no longer making a profit.B)Consumption of milk, cheese, and other dairy products has dropped over the past five years.C)The price of feed for cattle has risen because of the increased cost of fuel used to power the equipment needed to grow the feed.D)International supplies of milk have increased, causing the price that U.S. dairy farmers are paid for their milk to stay low, despite increased costs of production.E)The price paid by the consumer for milk, cheese, and ice cream has not changed over the past five years.

Answer 1

Answer:

A) Unless they have found other ways to cut expenses, some dairy farmers are no longer making a profit.

Explanation:

The situation for dairy farmers is as follows:

• were barely making any profit five years ago
• their costs have significantly increased
• their revenue has stayed the same

Then many of them should be working without making any profit at all or directly losing money.

The equation is simple: Revenue - total costs = profit

If revenue stayed the same and total costs increased, then profits decreased.