Exhibit 7-10 Price and Cost Data for a Firm In Exhibit 7-10, Following the Rule Regarding MR and MC

Exhibit 7-10 Price and cost data for a firm $$\begin{array} { | c | c | c | c | c | } \hline \text { Q } & \text { P } & \text { AVC } & \text { ATC } & \text { MC } \\\hline 0 & \$ 12 & - & - & - \\1 & 12 & 3 & 5 & 5 \\2 & 12 & 5 & 6 & 7 \\3 & 12 & 7.3 & 8 & 12 \\4 & 12 & 9.5 & 10 & 16 \\\hline\end{array}$$ In Exhibit 7-10, following the rule regarding MR and MC, the most profitable output level is:

A) 1.
B) 2.
C) 3.
D) 4.