A monopolist produces the equilibrium output of 400 units at a price of $40.Given that the monopolist's marginal cost is equal to $15 and average cost is equal to $23,what is the monopolist's profit?
A)$6,800
B)$800
C)$1,600
D)$4,000
E)$1,000

Question

Quizplus · Accepted Answer

The monopolist's profit is calculated as (Price - Average Cost) * Quantity. Here, it is ($40 - $23) * 400 = $6,800.

A Monopolist Produces the Equilibrium Output of 400 Units at a Price