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Figure: The Profit-Maximizing Output and Price
-(Figure: The Profit-Maximizing Output and Price)Use Figure: The Profit-Maximizing Output and Price.Assume that there are no fixed costs and AC = MC = $200.At the profit-maximizing output and price for a monopolist,total surplus is:
A)$3,200.
B)$4,800
C)$1,000.
D)$1,600.

Question

Use the following to answer question:
Figure: The Profit-Maximizing Output and Price 
-(Figure: The Profit-Maximizing Output and Price)Use Figure: The Profit-Maximizing Output and Price.Assume that there are no fixed costs and AC = MC = $200.At the profit-maximizing output and price for a monopolist,total surplus is:
A)$3,200. 
B)$4,800 
C)$1,000. 
D)$1,600.

Quizplus · Accepted Answer

At the profit-maximizing output and price, the monopolist produces 24 units and sets a price of $400. The total surplus is the sum of producer surplus ($4,800) and consumer surplus ($0), which equals $4,800. Therefore, the correct answer is B.

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