​A Firm Sets Its Price at $10

question 17

Multiple Choice

​A firm sets its price at $10.00 per unit.It has an average variable cost of $8.00 and an average fixed cost of $4.00 per unit.In the long run,this firm is

• A)​earning zero profits and hence should shut down.
• B)unable to cover all of its fixed cost and hence should shut down.
• C)incurring a profit.
• D)​incurring a loss per unit of $2.00,but since it can still cover its variable costs,should continue to operate.

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