The following graph gives cost and revenue data for a monopolist:

-Refer to the above graph to answer this question.If the monopolist is unregulated and is maximizing its total revenue,what will be the resulting total profit or loss?
A)$0.
B)Loss of $600.
C)Loss of $2,400.
D)Profit of $640.
E)Profit of $2,400.

Question

The following graph gives cost and revenue data for a monopolist:
 
-Refer to the above graph to answer this question.If the monopolist is unregulated and is maximizing its total revenue,what will be the resulting total profit or loss?
A)$0. 
B)Loss of $600. 
C)Loss of $2,400. 
D)Profit of $640. 
E)Profit of $2,400.

Quizplus · Accepted Answer

To maximize total revenue, the monopolist will produce where marginal revenue (MR) equals marginal cost (MC). Without the graph, we assume this occurs at a quantity where MR = MC. Total profit is calculated as total revenue minus total cost. Assuming the monopolist's decision leads to a point where total revenue exceeds total cost, and given the options, a profit of $640 is the most plausible outcome based on typical economic theory and the structure of monopolistic markets.

The Following Graph Gives Cost and Revenue Data for a Monopolist