Assume a perfectly competitive firm sells its output for $250 per unit. At its current 2,000 units of output, marginal cost is $180 and increasing, and average variable cost is $160. Assuming it wants to maximize its profits, it should ________.
1) Increase production to increase profits
2) Decrease production to increase profits
3) Keep production at the current level to maximize profits
4) Cannot be determined without additional information