A company finds that at the output level at which marginal cost equals marginal revenue, TC = $500, TVC = $400, and TR = $450. Your advice to the firm is

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At the output level where MC=MR, the firm is operating at the profit-maximizing level of output. 
Total cost (TC) = $500 and Total variable cost (TVC) = $400, which means that Total fixed costs (TFC) = $100. 
Total revenue (TR) = $450, which is less than total costs. However, the firm should continue to produce because the loss ($50) is less than TFC ($100). Shutting down would result in a loss of $100. Therefore, the firm should continue to operate in the short run, even if it is making a loss.

A Company Finds That at the Output Level at Which