Answer:
Mrs Smith either shut down the business or invest in efficient equipements that lowers the total cost to below $7
Explanation:
The reason is that the you can not make profit if you product is sold in the market at a higher price than the competitor who offers the same product with the same features. So here, Smith can not make profits by selling the product at $8 because here total cost is $8.25 per unit.
So either she should invest in the business equipments which bring efficiencies and keeps the total costs to below $7 or she should shut down her business because the business is turned into loss making machine.
