1. **Problem Statement:** Determine the output level and price at which the firm maximizes profit given the curves MC (Marginal Cost), ATC (Average Total Cost), MR (Marginal Revenue), and D (Demand). 2. **Key Concept:** Profit maximization occurs where Marginal Revenue (MR) equals Marginal Cost (MC). This is because producing beyond this point would cost more than the revenue gained, and producing less would mean missing out on profitable sales. 3. **Step-by-step Solution:** - Identify the output where MR = MC on the graph. - From the description, the MR curve slopes downward steeply and MC slopes upward steeply. - The intersection of MR and MC occurs approximately at output = 340 units. 4. **Determine the price:** - At output = 340, find the corresponding price on the Demand (D) curve. - The D curve is downward sloping more gently than MR. - At output 340, the price on the D curve is approximately 50 dollars. 5. **Conclusion:** - The firm maximizes profit by producing 340 units. - The profit-maximizing price is 50 dollars. This follows the fundamental rule of profit maximization in microeconomics: produce where $MR = MC$ and charge the price consumers are willing to pay at that quantity on the demand curve.