A monopolist produces 14,000 units of output and charges Rs. 14 per unit. Its marginal revenue is Rs. 8, its marginal cost is Rs. 7 and rising, its average total cost is Rs. 10, and its average variable cost is Rs. 9. The monopolist should :
1
increase output, which will result in an increase in the firm's positive economic profit.
2
increase output, which will reduce the firm's economic losses.
3
shut down, which will reduce the firm's economic losses.
4
decrease output, which will result in an increase in the firm's positive economic profit.