Use the Following to Answer Question

Multiple Choice

Use the following to answer question:
Figure: Monopolistic Competitor
-(Figure: Monopolistic Competitor) Use Figure: Monopolistic Competitor.If the firm shown in the figure produces at its profit-maximizing level,it will produce:

A) with excess capacity since its P is greater than MR.
B) without excess capacity since P is greater than ATC.
C) with excess capacity since that output level is on the downward-sloping portion of the ATC curve.
D) without excess capacity since that output level is on the downward-sloping portion of the MR curve.