Figure 16-3
-Refer to Figure 16-3. The maximum total short-run economic profit for the monopolistically competitive firm in this figure is

Question

Figure 16-3 
-Refer to Figure 16-3. The maximum total short-run economic profit for the monopolistically competitive firm in this figure is

Quizplus · Accepted Answer

The maximum total short-run economic profit is found by subtracting total cost from total revenue. The profit-maximizing quantity is where marginal cost equals marginal revenue, which is at a quantity of 6,000 units in this scenario. At this quantity, the price from the demand curve is $9,000, making total revenue $54,000 (6,000 units * $9 per unit). The total cost at this quantity is $51,000. Therefore, the maximum total short-run economic profit is $54,000 - $51,000 = $3,000.

Figure 16-3 -Refer to Figure 16-3. the Maximum Total Short-Run Economic Profit