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The equilibrium price in a perfectly competitive market is $\$20$. A typical firm in that market is currently producing $80$ units of output at which the average total cost (ATC) is $\$20$ and rising, and marginal cost (MC) is $\$25$.

Based on the information above, which of the following is TRUE?

A

To maximize profits, this firm should increase its output.

B

This firm is currently producing the profit-maximizing output.

C

This firm can earn economic profits in the short run but not in the long run.

D

This firm can only earn normal profits in the short run and long run.

E

This firm can earn economic profits in both the short and long run.

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