On a cost curve graph, if the price is below the average total cost but above the average variable cost, what should the firm do in the short run and long run?

• A. Exit in both the short run and long run.
• B. Produce in the short run, exit in the long run.
• C. Exit in the short run, produce in the long run.
• D. Produce in both the short run and long run.

Answer: (B)