Consider the Following Cost Curves for Firm X,a Perfectly Competitive

Multiple Choice

Consider the following cost curves for Firm X,a perfectly competitive firm. FIGURE 9-5
-Refer to Figure 9-5.If Firm X has a capital stock that generates SRATC₁,then in the long run Firm X will have to

A) either expand its plant size or exit from the industry.
B) set its output at Q₁ with the existing plant size.
C) expand its output to Q₂ with the existing plant size.
D) set its output at Q₁ with an expanded plant size.
E) maintain its output level at Q₁,because it is maximizing its short-run profits.