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# Answer to Question #49398 in Microeconomics for susie

Question #49398
Suppose that at 200 units of output a monopolist is producing such that marginal revenue is equal to marginal cost. The firm is selling its output at a price of $5 per unit and is incurring average variable costs of$3 per unit and average total costs of $4 per unit. On the basis of this information we can conclude that the firm: is operating at maximum profit by producing the 200 units of output should increase its use of variables inputs in order to reduce its total variable costs TVC is operating at a loss that is less than the loss incurred by shutting down should close down Expert's answer Q = 200 units at MR = MC, P =$5, AVC = $3 per unit, ATC =$4 per unit.
On the basis of this information total profit TP = (P - ATC)*Q = (5 - 4)*200 = \$200, and as at the output of 200 units MR = MC,&nbsp;we can conclude that the firm&nbsp;is operating at maximum profit by producing the 200 units of output.
So, the right answer is a)&nbsp;is operating at maximum profit by producing the 200 units of output.

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