Consider the Following Cost Curves for Two Perfectly Competitive Firms,A

Multiple Choice

Consider the following cost curves for two perfectly competitive firms,A and B. FIGURE 9-3
-Refer to Figure 9-3.If Firm B is producing at output level q₂,and selling its output at p₀,then Firm B should

A) remain at this output level because profits are maximized when SRAVC is at its minimum.
B) expand output to q₁ because profits are maximized when SRATC is at its minimum.
C) shut down because at this price and output level the firm is suffering losses.
D) expand output to q₀ so that profits will be maximized.