Gamma Corporation's Marginal Cost Curve Intersects Its Average Variable Cost

Gamma Corporation's marginal cost curve intersects its average variable cost curve at $100 and intersects its average total cost curve at $800. What happens at a price of $700?

A) It makes a profit in the short run and in the long run.
B) It produces in the short run but not in the long run.
C) It produces in the long run but not in the short run.
D) It shuts down.

Correct Answer:

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