T-Shirt Enterprises is selling in a purely competitive market. It is producing 3,000 units, selling them for $2 each. At this level of output, the average total cost is $2.50 and the average variable cost is $2.20. Based on these data, the firm should
shut down in the short run.
decrease output to 2,500 units.
ontinue to produce 3,000 units.
increase output to 3,500 units.