Bob Runs a Pedicure Business in a Perfectly Competitive Industry

Multiple Choice

Bob runs a pedicure business in a perfectly competitive industry. He knows that he will break even if the price of pedicures is $15 but that he will have to shut down if the price is $11. If the market demand in the industry is P = 30 - (0.2) Q and the market supply is P = (0.2) Q, in the short run, Bob will:

A) shut down, since he cannot cover any of his variable costs.
B) produce but just break even.
C) produce with a loss, since he is operating below his break-even level.
D) shut down, although he is making a positive economic profit.