A Doorknob Manufacturer Sells 400 Doorknobs at a Price of $10

Multiple Choice

A doorknob manufacturer sells 400 doorknobs at a price of $10 each. It has total costs of $4,500, of which $700 are fixed costs. This means the firm

A) has an economic profit of $500
B) should produce in the short run at a loss
C) should shut down in the short run
D) has total variable costs of $500
E) has price less than average variable cost