This case should be considered from the perspective of short-term equilibrium of perfectly competitive manufacturers. Because the demand curve of popsicle manufacturers is a horizontal straight line starting from the established market price level, manufacturers are unable to change the demand curve. However, in the short term, in the face of the established production scale, the profit maximization requirement of Mr = SMC can be realized by adjusting the output. By comparing the position relationship between SMC=MR intersection and SAC (short-term average cost) and AVC (average variable cost), this paper discusses:

1. When AR (average income) ≥ SAC, the manufacturer can control the popsicle output at the level of balanced output Q* and get the maximum profit.

2. When AVC ≤ AR ≤ SAC, in this case, the profit of popsicle manufacturers is negative, but production is better than no production. Output can make up for the loss that has not become a cost in the short term.

3. when AR