Mrs. Smith is operating a firm in a competitive market

Mrs. Smith is operating a firm in a competitive market. The market price is $6.50. At her profit-maximizing level
of output. her average total cast of production is $100, and her avenge variable cost of production is $6.00.
Which of the following statements about Mrs. Smith’s firm is concct’? a. Mrs. Smith is earning a loss and should shutdown in the short run. b. Without knowing Mrs. Smith’s marginal cost. we cannot determine whether she should
stay in business or shut down. c. Mrs. Smith is coming a loss but should continue to operate in the short run. (1. Mrs. Smith is earning a profit since the price is above the average variable cost.