The correct answer is: B. In short-run equilibrium
A firm is in short-run equilibrium when it is producing at the level of output where marginal cost is equal to marginal revenue. In this case, the firm is maximizing its profits in the short run.
However, the firm is not in long-run equilibrium because marginal revenue is below average variable cost. This means that the firm is losing money in the long run. In the long run, the firm will either have to reduce its costs or exit the market.
Option A is incorrect because the firm is not in long-run equilibrium.
Option C is incorrect because the firm is not minimizing its short-run average total cost.
Option D is incorrect because the firm is not breaking even.