Figure 13-5 -Refer to Figure 13-5.The Candy Store Represented in the Diagram

Multiple Choice

Figure 13-5

-Refer to Figure 13-5.The candy store represented in the diagram is currently selling Qₐ units of candy at a price of Pₐ.Is this candy store maximizing its profit and if it is not, what would you recommend to the firm?

A) Yes, it is maximizing its profit by charging the highest price possible.
B) No, it is not; since its marginal cost is constant, it should produce and sell as much candy as it can. It should sell Qd units at a price of Pd.
C) No, it is not; it should lower its price to Pc and sell Qc units.
D) No, it is not; it should lower its price to Pb and sell Qb units.