Use the Figure Below to Answer the Following Questions

Multiple Choice

Use the figure below to answer the following questions.

Figure 12.4.3
-Refer to Figure 12.4.3, which shows the cost curves and marginal revenue curve of a firm in a perfectly competitive market. Firms are

A) making an economic profit, and some firms leave the market. Market supply decreases.
B) making an economic profit, and some firms enter the market. Market supply increases.
C) incurring an economic loss, and some firms leave the market. Market supply decreases.
D) incurring an economic loss, and some firms enter the market. Market supply increases.
E) incurring an economic loss, but since they are covering average variable cost, no one will exit the market in the long run.