Figure 7-4 Shows the Relationship Between the Various Costs of a Perfectly

Figure 7-4 shows the relationship between the various costs of a perfectly competitive firm. In the figure, when the market price equals $105 and the firm sells 675 units of output, the firm:Figure 7-4

A) is earning a normal profit.
B) is earning positive economic profit.
C) is experiencing a loss, but should continue operating temporarily because business conditions may improve.
D) is experiencing a loss and should shut down.
E) should sell more units of its output to earn higher prices.