In the short-run, when a simple monopoly firm attains equilibrium and earns only normal profit, its level of output will correspond to:

The correct answer is C. Average cost equals marginal cost.

A monopoly firm is the only seller of a good or service in a market. It faces the demand curve for its product, which is downward-sloping. The firm maximizes profit by producing the quantity at which marginal revenue equals marginal cost. At this quantity, average cost is equal to marginal cost.

Option A is incorrect because the lowest average cost is achieved at a higher level of output than the profit-maximizing level of output.

Option B is incorrect because average cost is above the optimum level of output.

Option D is incorrect because marginal cost is much below average cost at the profit-maximizing level of output.