Suppose Robin's Clock Works produces in a perfectly competitive market. Suppose the average total cost of clocks is $95, the average variable cost of clocks is $90, and the price of clocks is $85. If the firm is producing the level of output where marginal cost equals price, then in the short run the firm
A) should shut down.
B) should continue to produce since total revenue exceeds total variable cost.
C) is earning a positive economic profit.
D) can increase profit by increasing output.
Correct Answer:
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