A graph showing demand (D

D) and marginal revenue (MR

MR), average total cost (ATC

ATC), average variable cost (AVC

AVC), and short-run marginal cost (MC

MC), with quantity (Q

Q) on the horizontal axis and demand, marginal revenue, and costs in dollars on the vertical axis.D

DandMR

MRboth have vertical intercepts of $8;MR

MRhas horizontal intercept at 80 units andD

Dhas horizontal intercept at 160 units. AtQ=45

Q=45,ATC=MR

ATC=MRat $3.50; at thisQ,MC=$1.50,AVC=$2,D=$6

Q,MC=$1.50,AVC=$2,D=$6.AtQ=60

Q=60,MR

MR,AVC

AVC, andMC

MCall intersect at $2; at thisQ,ATC=$3,D=$5

Q,ATC=$3,D=$5. AtQ=75

Q=75,ATC=MC

ATC=MCat $3; at thisQ,MR=$0.50,AVC=$2,D=$4

Q,MR=$0.50,AVC=$2,D=$4.AtQ=80

Q=80,MC=D

MC=Dat $4; at thisQ,MR=$0,AVC=$2,ATC=$3

Q,MR=$0,AVC=$2,ATC=$3.AtQ=100

Q=100,ATC=D

ATC=Dat $3; at this Q,AVC=$2.50

AVC=$2.50.AtQ=105

Q=105,AVC=D

AVC=Dat $2.50; at thisQ,ATC=$3.25

Q,ATC=$3.25.

The profit-maximizing level of output is

Select one:

a.80 units.

b.75 units.

c.60 units.

d.105 units.