Exhibit 8-8 A firm's cost and marginal revenue curves
In Exhibit 8-8, product price in this market is fixed at $35. This firm is currently operating where MR = MC. Which of the following is true?

A. Price > AVC and this firm should shut down.
B. This firm is earning a profit of zero.
C. This firm could increase profits by increasing output.
D. Price > AVC and the firm should continue producing its current output.


Answer: D

Economics

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