For a monopoly firm, marginal revenue equals marginal cost at 100 units (of output). At 100 units, price is above marginal cost. It follows that the monopoly firm

takes losses.

faces some close substitutes for its product.

earns profit.

is not resource-allocative efficient.

faces no substitutes for its product.

A firm has a patent monopoly for product X which it sell from kiosks at malls across the county.Supposethe firm is currently maximizing profitsat the kiosk it operates at the local mall.Theprice it charges for the product is $100.Itsells 40 unitseach month at this profit maximizing price.The mall's management company has to the firm that rent will increase with the new lease that goes into effect next month by$80 per month.As the firm's general manager and financial analyst what pricing strategy would you recommend starting next month?

Keep the price at exactly $100.

Increase the price by $2 per unit.

Increase the price by $2.50 a unit.

Reduce the price of the product

Increase the price by $4 per unit.