The diagram illustrates the supply curve for coffee. The price of coffee rises from $P_1$ to $P_2$. In what way would this advantage firms in the coffee industry?
- AA higher price gives firms the ability to increase profits.
- BA higher price gives firms the incentive to reduce total fixed costs.
- CA higher price will encourage consumers to buy more coffee increasing total revenue.
- DA higher price will encourage less firms to enter the market to supply coffee.