(Figure: The Profit-Maximizing Firm in the Short Run) Use Figure: The Profit-Maximizing Firm in the Short Run.If the market price is less than P₂,the firm will _____ in the short run.

A) produce q₁ and break even
B) produce q₁ and incur a loss smaller than total fixed cost
C) shut down
D) produce q₃ and make a profit

Profit-Maximizing

A strategy or point where a business achieves the highest possible profit with its current resources and market conditions.

Short Run

A period in economics where at least one input (such as plant size) is fixed, limiting the ability of a firm to adjust to market changes.

Market Price

The current price at which a good or service can be bought or sold in a given market.