Tony's Pastry is a popular bakery in Elizabeth, New Jersey known for their cannolis. Suppose that bakeries (and cannoli shops in particular) are a (perfectly) competitive business in Elizabeth, New Jersey. At their current level of production, Tony's Pastry estimates the following for its standard cannoli:

• P = $4
• Q = 200
• TVC = $900

Tony's Pastry also knows that they are currently operating at the point where Average Variable Cost is minimized. Given your knowledge of microeconomics and using the values above, which of the following should Tony's Pastry do?

(Assume all cost curves have their typical u-shapes.)

Group of answer choices

a. Keep production at the same level.

b. Increase output.

c. Decrease output.

d. Shut down immediately.

e. Impossible to answer without more information.