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 a normal 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

Quizplus · Accepted Answer

The firm is currently making an economic profit, as the price is above the average total cost. To maximize its profit, the firm should increase its production until the marginal cost equals the price.

Suppose the Price of a Can Was $5