If Price Is Above Average Variable Cost and Below Average

Multiple Choice

If price is above average variable cost and below average total cost, a profit-maximizing price taker should

A) immediately shut down; failing to do so is contrary to the idea of profit maximization in a competitive market.
B) continue producing as long as it expects the market price to rise above average total cost in the near future.
C) attempt to push price upward by slowly reducing output.
D) cut price so more units can be sold.