Below is a model of a perfectly competitive firm. In the short run, to maximize profit, this firm will:$8765S431Produce Q* and earn an economic profitMC0 5 10 15 20 25 30 35 40 45 50O Exit the industryO Produce Q* and earn an economic lossO Shut down and produce Q* units of outputShut down and produce 0 units of outputATCAVCMR

In this given situation, the market situation of a competitive market is provided. In this scenario,…

Below is a model of a perfectly competitive firm. In the short run, to maximize profit, this firm will: $ 00 8 7 6 5 3 2 O Produce Q* and earn an economic profit 0 5 10 15 20 25 30 35 40 45 50 Exit the industry MC O Produce Q* and earn an economic loss O Shut down and produce Q* units of output O Shut down and produce 0 units of output ATC AVC MR Q