The appropriate rent would be determined by the competitive situation. The minimum acceptable rent would be determined by the additional costs associated with renting the gym. For example, the rent should be high enough to cover the extra utilities, janitor's fees, pay for security guards, and any other costs associated with renting the gym and a little extra to leave the high school better off. Ignore this question. Because a price taker can sell its entire output at a constant price, MR is equal to P for the price taker.
Marginal revenue is less than price for the price searcher.
This means that the profit maximizing price searcher will produce less output than is socially desirable. The price searcher should continue to operate whenever it will incur a smaller loss by operating than by shutting down. If price exceeds average variable cost, each unit that the firm sells will cover the variable cost of producing that unit and leave something to help ray the firm I s fixed costs. Under these conditions, the firm should continue to operate. If price is less than average variable cost, the firm should shut down.