Explanation:

- In perfect competition, a seller maximizes profit by equating price to marginal cost (MC). This is because price equals both marginal revenue (MR) and average revenue (AR) in perfect competition.

- Monopolists, however, face a downward-sloping demand curve. This means MR is less than price. To maximize profits, monopolists equate marginal revenue (MR) and marginal cost (MC).

- Option 1: MR and MC – This is the correct method for a monopolist to maximize profits.

- Option 2: AR and MR – This is incorrect; monopolists do not equate average revenue (AR) and marginal revenue (MR).

- Option 3: AR and MC – This does not apply to profit maximization in a monopoly.

- Option 4: TC and TR – Equating total cost (TC) and total revenue (TR) is not related to profit maximization but rather achieving a break-even point.