If the market price is \$18 and the minimum average variable cost is \$14, at what quantity will a firm produce if the marginal cost at that quantity is also \$18?

• A. The firm will produce at the quantity where marginal cost equals \$14.
• B. The firm will not produce because the price is above the average variable cost.
• C. The firm will produce at the quantity where marginal cost equals \$18.
• D. The firm will produce at zero quantity.

Answer: (C)