The above figure shows some a firm's cost curves and its marginal revenue curve.
-Suppose the price of a can was $5.14.In this case,to maximize its profit the firm illustrated in the figure above would
A) increase its production and would make an economic profit.
B) not change its production and would make zero economic profit.
C) not change its production and would make an economic profit.
D) increase its production and would incur an economic loss.
E) not change its production and would incur an economic loss.

Question

The above figure shows some a firm's cost curves and its marginal revenue curve.
-Suppose the price of a can was $5.14.In this case,to maximize its profit the firm illustrated in the figure above would
A) increase its production and would make an economic profit. 
B) not change its production and would make zero economic profit. 
C) not change its production and would make an economic profit. 
D) increase its production and would incur an economic loss. 
E) not change its production and would incur an economic loss.

Quizplus · Accepted Answer

The firm is currently producing at a point where marginal cost is less than marginal revenue. By increasing production, the firm can increase its profit.

The Above Figure Shows Some a Firm's Cost Curves and Its