Figure: Firms in Monopolistic Competition (Figure: Firms in Monopolistic Competition) In panel C of the figure Firms in Monopolistic Competition, economic loss per unit is:

Question

Figure: Firms in Monopolistic Competition  (Figure: Firms in Monopolistic Competition) In panel C of the figure Firms in Monopolistic Competition, economic loss per unit is:

Quizplus · Accepted Answer

In panel C, the economic loss per unit is represented by the vertical distance between the average total cost (ATC) curve and the price (P) curve at the profit maximizing quantity (Q*). This distance is VT, which is the difference between the average total cost at Q* and the price at Q*. Therefore, the correct answer is option D.