Suppose that a monopolist is operating at its profit-maximizing point where the profit per unit is $8. If the average total cost of production is $4, then what is the price charged by the monopolist?

Question

Quizplus · Accepted Answer

The profit per unit is the difference between the price charged and the average total cost. Given a profit per unit of $8 and an average total cost of $4, the price charged by the monopolist must be $4 + $8 = $12.

Suppose That a Monopolist Is Operating at Its Profit-Maximizing Point