Scenario: the Fixed Cost of Producing 500 Units of Good

Multiple Choice

Scenario: The fixed cost of producing 500 units of Good Y is $25,000, while the variable cost of producing 500 units of Good Y is $60,000.
-Refer to the scenario above.A firm producing Good Y will ________.

A) earn economic profits if it charges a price of $120
B) incur losses if it charges a price of $200
C) earn zero economic profits if it charges a price of $170
D) shut down production if price falls below $200