Teddy's Bear Shop Operates in a Perfectly Competitive Market Where

Teddy's Bear Shop operates in a perfectly competitive market where the prevailing price is $15.Teddy's marginal cost curve crosses his average total cost curve at $20.The marginal cost curve crosses his average variable cost curve at $17.In the short run,Teddy's Bear Shop

A) should operate at a lower output level where it can suffer less of an economic loss
B) will suffer an economic loss,but should continue to operate at the minimum of its average variable costs
C) will just break even,with neither a profit nor a loss,and should operate
D) will suffer an economic loss and should shut down
E) should operate at a higher output level where it can suffer less of an economic loss

Correct Answer:

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