The diagram below shows total revenue for a single- price monopolist.
FIGURE 10- 3
-A monopolist will be earning positive economic profits

Question

The diagram below shows total revenue for a single- price monopolist.
  FIGURE 10- 3
-A monopolist will be earning positive economic profits

Quizplus · Accepted Answer

Positive economic profits occur when total revenue exceeds total cost. In a single-price monopoly, the profit-maximizing output is where marginal revenue equals marginal cost. At this output level, the monopolist will charge a price that exceeds average total cost. Therefore, the correct answer is option C.

The Diagram Below Shows Total Revenue for a Single- Price