A Firm in a Competitive Market Has the Following Cost

Multiple Choice

A firm in a competitive market has the following cost structure: If the market price is $16, this firm will

A) produce 4 units of output in the short run and exit in the long run.
B) produce 5 units of output in the short run and exit in the long run.
C) produce 5 units of output in the short run and face competition from new market entrants in the long run.
D) shut down in the short run and exit in the long run.