reply2spg wrote:Under the agricultural policies of Country R, farmers can sell any grain not sold on the open market to a grain board at guaranteed prices. It seems inevitable that, in order to curb the resultant escalating overproduction, the grain board will in just a few years have to impose quotas on grain production, limiting farmers to a certain flat percentage of the grain acreage they cultivated previously.

Suppose an individual farmer in country R wishes to minimize the impact on profits of the grain quota whose eventual imposition is being predidcted. If the farmer could do any of the following and wants to select the most effective course of action, which should the farmer do now?

(A) Select in advance currently less profitable grain fields and retire them if the quota takes effect.
(B) Seek long-term contracts to sell grain at a fixed price
(C) Replace obsolete tractors with more efficient new ones
(D) Put marginal land under cultivation and grow grain on it
(E) Agree with other farmers on voluntary cutbacks in grain production




[spoiler]I don't have OA for this. But IMO answer is A[/spoiler]

Why I selected A - Farmers are going to get flat percentage. There is a possibility that farmer's profit will go down. If I were farmer, then I would have done cost cutting by retiring those fields, which are less profitable. I simply personalize this argument and arrived at A. Please help me to understand if my logic is correct.