Exhibit 8-9 a Firm's Cost and Marginal Revenue Curves

Exhibit 8-9 A firm's cost and marginal revenue curves

In Exhibit 8-9, product price in this market is fixed at $7. This firm is currently operating where MR = MC. What do you advise this firm to do?

A) This firm should shut down.
B) This firm could increase profits by increasing output.
C) This firm could increase profits by decreasing output.
D) This firm should increase price.