The Hilltop Coffee Company is a perfectly competitive firm producing where MR = MC. The current market price of a tall café latte is $5.00. Hilltop sells 200 tall café lattes. Its AVC for coffee lattes is $8.00 and its AFC is $3.00. What should Hilltop do?
A. Continue to produce because price exceeds AFC.
B. Increase production so that AFC will decrease.
C. Decrease production so that AVC will decrease.
D. Shut down and produce zero café lattes because price is less than AVC.
D. Shut down and produce zero café lattes because price is less than AVC.
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