According to Global Economics for Managers, firms should increase production when marginal revenue (MR) exceeds marginal cost (MC), making option C correct.

In this case, MR = $1,000 and MC = $600. Producing one additional unit generates more revenue than cost, increasing profit by $400. Rational, profit-maximizing firms should continue expanding output as long as MR > MC.

This decision rule applies across market structures, including monopoly, oligopoly, and perfect competition. The firm should stop increasing production only when MR equals MC.

Options A, B, and D would cause the firm to forgo profitable opportunities.

Thus, option C is the correct managerial response.