A monopoly firm is at liberty to increase the price by restricting output or to decrease the price by increasing output.

The monopolist is in equilibrium at a point where MC=MR

The monopolist is in equilibrium when MC= MR. We extend the line from point A to meet the demand curve and average cost  curve at point  E . So, the equilibrium of the monopolist is at point E where MC=MR and also AC=AR. At equilibrium (E) the monopolist earns normal profits producing  equilibrium out put Q1  and selling it at price P1.