Amonopolistically competitive firm is producing at a short-run output level where average total cost is $10.00, marginal cost is $5.00, marginal revenue is $6.00, and price is $12.00. in the short run, the firm should:
1. decrease the level of output.
2. increase the level of output.
3. make no change in the level of output.
4. increase product price.

2. Increase the level of output

Explanation:

A monopolistically competitive firm has Producer's Equilibrium where :                Profit (i.e difference between Total Revenue & Total Expenditure) is maximum .                                                                                                                         This distance is max where: TR & MR are parallel (have equal slopes) ,slope being MR & MC (change in TR , TC with change in quantity) .  

So, Producer Equilibrium : TR - TC is maximum , MR = MC                                                  When MR > MC :  Additional Revenue from additional production is greater than Additional Cost from it , so it is Profitable to Increase production When MC > MR : Additional Revenue from additional production is less than Additional Cost from it , so it is better to Decrease production

answer the amount a seller is paid minus the cost of production;

answer(d) all of the choices are correct;