Question 2 (i) A bicycle manufacturer expects the price of bicycle to rise in the near future, the supplier will ______________________. A: increase the supply of bicycle now B: decrease the supply of bicycle now C: decrease the quantity supplied of bicycle now D: increase the quantity supplied of bicycle now (ii) Red Mountain Coffee Company (RM) is a monopolistic competitive firm. At which of the following quantity should RM produce in order to maximize its profit? A: When marginal cost is equal to average revenue. B: When marginal cost is equal to marginal revenue. C: When the average total cost is equal to average revenue. D: When the average variable cost is equal to marginal revenue.

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