For the next 2 questions use the following information:

The local economy in the Levant region of Southern Spain is based predominantly on the production of oranges. The available land is divided into 50 farms: 30 "large" and 20 "small." Each large farm produces 10,000 oranges per season at a unit cost of 0.1. Thus its total cost of producing q oranges, for 0 q 10,000, is given by

C(q)=0.1q, for 0 q 10,000

Similarly, each small farm produces 6,000 oranges per season at a unit cost of 0.2. Thus its total cost of producing q oranges, for 0 q 6,000, is given by

C(q)=0.2q, for 0 q 6,000

All other costs can be ignored.

suppose that after having been as high as 0.3, the price of oranges has decreased to 0.15, and is likely to remain at this level for the next several seasons. Then:

a. All farms will continue to produce, but their revenues and profit will decrease.

b. None of the other statements is correct.

c. The large farms will still produce, but the small farms will stop operating.

d. All farms will stop producing.

e. Some farms will stop producing, and the others will benefit from the lack of competition.