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7. You are operating a coal strip mine. The mine can produce 150,000 tons a year and to close the mine will cost $5 million.
7. You are operating a coal strip mine. The mine can produce 150,000 tons a year and to close the mine will cost $5 million. When should the mine be closed?
A) At a net coal price after extraction costs of $33.33 per ton.
B) At a net coal price after extraction costs greater than $33.00 per ton.
C) If the mineable coal still exists it should never be closed.
D) If mineable coal still exists at a net coal price significantly below $33.33 if coal prices have high volatility.
E) None of the above.
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