If a firm is enjoying modest accounting profit but incurring significant economic losses, which of the following must be true?

A)The explicit costs of the business are greater than its total revenue.

B)The firm's marginal revenue is greater than its marginal cost.

C)The business should increase production until marginal cost is greater than average total cost.

D)The business will shut down in the short run.

E)The business has another opportunity that could bring in much more revenue.

I TRIED A and C AND WERE INCORRECT...

A profit-seeking firm is in a competitive market and experiences the following production figures: marginal cost equals marginal revenue at $4.50, marginal cost equals average total cost at $6, and marginal cost equals average variable cost at $4. Based on these figures, what should it do?

A)Operate in the short run and exit the market in the long run.

B)Shut down in the short run.

C)Decrease production to lower costs.

D)Operate in the short run and stay in the market, enjoying economic profits.

E)Operate in the short run and stay in the market, enjoying accounting profits.

I TRIED C and E AND WERE INCORRECT...