Explain if firm is suffering economic losses


Williams Company is a perfectly competitive firm. The price for the firm's output is $20 per unit. At its current level of output, marginal cost is $20 per unit, average total cost is $25 per unit, and average variable cost is $22 per unit. What can we say about Williams Company?

A. The firm is suffering economic losses, but it should stay in business in the short run.

B. The firm can increase profits by increasing output.

C. The firm should shut down in the short run.

D. The firm is making positive economic profits.

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Microeconomics: Explain if firm is suffering economic losses
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