T-Shirt Enterprises Is Selling in a Purely Competitive Market

Multiple Choice

T-Shirt Enterprises is selling in a purely competitive market. It is producing 3,000 units, selling them for $2.00 each. At this level of output, the average total cost is 2.50 and the average variable cost is $2.20. Based on these data, the firm should

A) shut down in the short run.
B) decrease output to 2,500 units.
C) continue to produce 3,000 units.
D) increase output to 3,500 units.