Price exceeds Average variable cost but is smaller than average Total cost at the optimum level of output, the firm is
A. making a profit and should continue to produce
B. incurring a loss but should continue to produce
C. incurring a loss and should stop producing immediately
D. break even and maintain current output
Answer:B
Price exceeds Average variable cost but is smaller than average Total cost at the optimum level of output, the firm is
A. making a profit and should continue to produce B. incurring a loss but should continue to produce C. incurring a loss and should stop producing immediately D. break even and maintain current output