Assume the Unico Corporation is producing 40 units of output and selling the output in a perfectly competitive market for $5 per unit. Its total fixed costs are $110 and its average variable cost is $4 for each of the 40 units of output. Unico:
A) earns a profit of $40.
B) maximizes its profits.
C) earns a loss of $70.
D) should shut down.
Answer: C) earns a loss of $70.
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