A tech company is considering entering a market where the average total cost is \$50 per unit, and the expected price is \$55 per unit. What should the company do, and what are the implications?

• A. Enter the market, as it can cover its costs and earn a profit.
• B. Stay out of the market, as the price is less than the average total cost.
• C. Exit the market, as it cannot cover its costs.
• D. Enter the market, but expect to make a loss.

Answer: (A)