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Figure: Profit Maximization in Monopolistic Competition
-(Figure: Profit Maximization in Monopolistic Competition) In the short run, a firm in monopolistic competition may earn economic profits. The profits in the figure Profit Maximization in Monopolistic Competition, panel (A), are:
A) PS.
B) PS × M.
C) PS × Q.
D) PT × Q.

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Use the following to answer questions:
Figure: Profit Maximization in Monopolistic Competition 
-(Figure: Profit Maximization in Monopolistic Competition) In the short run, a firm in monopolistic competition may earn economic profits. The profits in the figure Profit Maximization in Monopolistic Competition, panel (A), are:
A) PS. 
B) PS × M. 
C) PS × Q. 
D) PT × Q.

Quizplus · Accepted Answer

In monopolistic competition, the profit is calculated as the difference between price (P) and average total cost (ATC) multiplied by the quantity (Q) sold, which is represented as PS × Q in the figure.

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