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16. A competitive firm operating in the short run is producing at the output level at which ATC is at a minimum. If ATC = $8, and MR = $8, to maximize profits (or minimize losses), this firm should: a. increase output. b. do nothing, since it is already maximizing profits. c. reduce output. d. increase price. 20. Andrea is a chef at Knife restaurant in Dallas, Texas. She has been offered a position just down the road as head chef at Rapscallion, a move that would double her income. From this, we can surmise that, for every normal good Andrea now buys, her. a. marginal utility per dollar will stay the same as before her income increase. b. marginal utility per dollar will be smaller than before her income increase. c. total utility will be smaller than before her income increase. d. marginal utility per dollar will be greater than before her income increase. 22 (Figure: Monopoly Profits in Duopoly Market for Sugar) Use Figure: Monopoly Profits in Duopoly Market for Sugar. There are only two firms in the sugar industry. Each firm faces an identical demand curve, D1, and the market demand curve is D2. Which assumption is NOT a part of the analysis illustrated by this model? Price, marginal revenue, marginal cost MC - ATC MR, D1 - MR; 0 Q1 Q4 Qs Quantity of sugar (per period) a. Each firm has a horizontal marginal cost curve. b. The two firms are identical. c. The two firms sell identical products. d. While the firms face the same MC curves, their respective TC curves have unequal slopes