Figure 13-5 -Refer to Figure 13-5. the Candy Store Represented in the Represented

Multiple Choice

Figure 13-5
-Refer to Figure 13-5. The candy store represented in the diagram is currently selling Q_a units of candy at a price of P_a. Is this candy store maximizing its profit and if it is not, what would you recommend to the firm?

A) Yes, it is maximizing its profit by charging the highest price possible.
B) No, it is not; since its marginal cost is constant, it should produce and sell as much candy as it can. It should sell Q_d units at a price of P_d.
C) No, it is not; it should lower its price to P_c and sell Q_c units.
D) No, it is not; it should lower its price to P_b and sell Q_b units.