Exhibit 7-8 a Firm's Cost and Marginal Revenue Curves

Exhibit 7-8 A firm's cost and marginal revenue curves

In Exhibit 7-8, 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.