Suppose That, at the Current Level of Output, a Firm

Multiple Choice

Suppose that, at the current level of output, a firm in a perfectly competitive market is producing at a level such that price exceeds marginal cost, P > MC. Marginal cost is normally shaped (U-shaped) . The firm:

A) is currently maximizing profit since it is charging a price higher than marginal cost.
B) could increase profit by lowering the level of output.
C) could increase profit by increasing the level of output.
D) cannot increase profit without raising price.