Refer to the accompanying graph.The maximum short-run economic profit earned by this monopolistic competitive firm is:

Question

Quizplus · Accepted Answer

The maximum short-run economic profit earned by the firm is the area of the rectangle formed by the intersection of the marginal revenue and marginal cost curves (when both are positive), and the vertical line that intersects with the marginal revenue curve at the quantity where price equals average total cost. In this case, the maximum economic profit is approximately $66.

Refer to the Accompanying Graph