The following graph depicts the costs and revenues for an unregulated monopolist:

-Refer to the graph above to answer this question.What is the total profit at the monopolist's profit-maximizing output?
A)$48.
B)$120.
C)$128.
D)$144.
E)$208.

Question

The following graph depicts the costs and revenues for an unregulated monopolist:
 
-Refer to the graph above to answer this question.What is the total profit at the monopolist's profit-maximizing output?
A)$48. 
B)$120. 
C)$128. 
D)$144. 
E)$208.

Quizplus · Accepted Answer

To find the profit-maximizing output, we need to look for the output level where Marginal Cost (MC) equals Marginal Revenue (MR). This occurs at an output level of 8 units. At this level, the monopolist charges a price of $18 and incurs a cost of $8, resulting in a profit of $10 per unit. Therefore, the total profit at this output level is:
Profit per unit * Number of units sold = $10 * 12 units = $120
Thus, the correct answer is C: $128.

The Following Graph Depicts the Costs and Revenues for an Unregulated