Suppose That at the Current Level of Output, Pat's Hats

Multiple Choice

Suppose that at the current level of output, Pat's Hats has fixed costs of $500, variable costs of $1, 000, and $2, 000 in total revenue.Which of the following is true?

A) Profit is currently $500 and, in the long run, it will be $1, 000 because there will be no fixed costs.
B) Profit is currently $500 and, in the long run, it will be $1, 500 because there will be no variable costs.
C) Profit is currently $500.
D) Profit is currently $500, and Pat's Hats will want to decrease its plant size in the long run to lower its fixed costs.
E) Pat's Hats will continue to operate as long as revenue is greater than $500.