Refer to the accompanying figure. If the market for doughnuts is perfectly competitive, then assuming this firm can earn enough revenue to cover its variable cost, it should produce:
A. the quantity of doughnuts at which average total cost is minimized.
B. the quantity of doughnuts at which marginal cost equals the market price.
C. 50 doughnuts per day.
D. the quantity of doughnuts at which average total cost equals the market price.
Answer: B
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