Figure 16-7

Multiple Choice

Figure 16-7
-Refer to Figure 16-7. Suppose a firm is operating in the situation depicted in panel (a) . Which of the following statements is correct?

A) The firm is earning a positive short-run profit.
B) The firm is earning a negative short-run profit.
C) The firm is earning zero short-run profit.
D) We cannot determine profit because we do not know the firm's average total cost.