Use the Following to Answer Question(s)

Multiple Choice

Use the following to answer question(s) :
Exhibit: Profit Maximizing

-(Exhibit: Profit Maximizing) The exhibit shows cost curves for a firm operating in a perfectly competitive market. If the market price is less than P₂, the firm will _______ in the short run.

A) produce q₁ and break even
B) produce q₁ and incur a loss
C) shut down
D) do none of the above