Suppose MR = MC = $3 =MC=S3 at an output level of 2,000 units. If a monopolist produces and 2000 units, charging a price of 36 per unit and incurring average total cost of $5 per sit the monopolist will earn profit equal to: 1 $6,000. S4.000. $2,000. $1,000. For a firm with monopoly power that cannot engage in price discrimination: 2 the marginal revenue curve lies below the demand curve because any reduction in price applies only to the last unit sold. the marginal revenue curve lies below the demand curve because the firm must lower price on all units in order to sell a higher level of output. we marginal revenue curve lies above the demand curve because the monopoly firm can charge any price it wishes. total revenue is a linear function of output because sales are product price