At the present level of production, the marginal revenue exceeds the marginal cost of production. In order to attain equilibrium, the producer should

Option 1 -> When MR > MC, producing additional units adds more to revenue than to cost, so output should increase.

Option 2 -> Decreasing output when MR > MC would mean foregoing profitable production opportunities.

Option 3 -> Keeping output constant when MR > MC means the producer is not maximizing profit.

Option 4 -> Price reduction is not directly related to achieving equilibrium when MR > MC; output adjustment is needed.

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Hence, Option 1: Increase the level of output -> When marginal revenue exceeds marginal cost (MR > MC), each additional unit produced adds more to total revenue than to total cost, increasing total profit. To reach equilibrium and maximize profit, the producer should increase output until MR = MC. At this point, producing one more unit would add equally to both revenue and cost, making it the optimal production level. -> correct