Suppose that at $500$ units of output, marginal revenue is $$9,$ marginal cost is $$6,$ and average variable cost is $$7.$ On the basis of this information, we

Multiple Choice

can say that the firm should increase production in the short run.

can say that this firm is maximizing profits or minimizing losses in the short run.

cannot determine whether the firm should produce or shut down in the short run.

can say that the firm should continue to produce but reduce output in the short run.