7. Claude's Copper Clappers sells clappers for $65 each in a perfectly competitive market. At its present rate of output, Claude's marginal cost is $65, average variable cost is $45, and average total cost is $67. To maximize his profit or minimize his loss in the short run, Claude should

1. increase output
2. reduce output but not to zero
3. maintain the present rate of output
4. shut down
5. raise price

8. A price taker in a perfectly competitive industry is currently selling 6000 units per month at the market price of $8 per unit. Monthly total variable costs are $50,000 and total fixed costs are $20,000. Marginal cost is $8 per unit and rising. Economic profits

a. are equal to zero

b. are greater than zero

c. are less than zero

d. cannot be determined

9. Choose two (2) of the incorrect answers to multiple choice Question #7 (Claude's Copper Clappers problem) and explain why they are incorrect.