If at the MC = MR output, AVC exceeds price,

A) new firms will enter this industry.
B) the firm should produce the MC = MR output and realize an economic profit.
C) some firms should shut down in the short run.
D) the firm should expand its plant.

Marginal Cost

The hike in aggregate cost linked with the fabrication of one extra unit of a product or service.

Marginal Revenue

The additional income received from selling one more unit of a good or service, critical in determining optimal production levels.

Average Variable Cost

The total variable cost divided by the quantity of output produced, indicating the variable cost of producing each unit.