Assume Cathy's Cupcake Company Operates in a Perfectly Competitive Market

Multiple Choice

Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, price exceeds the firm's marginal and average variable costs. It follows that producing one more cupcake will cause this firm's

A) total cost to decrease.
B) profits to increase.
C) profits to decrease.
D) profits to remain unchanged.