Figure 11-2
-For the monopolist show in Figure 11-2, how much profit is the monopolist making per unit?
A)The amount shown as HE
B)The amount shown as GE
C)The amount shown as HF
D)The amount shown as FE

Question

Figure 11-2 
-For the monopolist show in Figure 11-2, how much profit is the monopolist making per unit?
A)The amount shown as HE 
B)The amount shown as GE 
C)The amount shown as HF 
D)The amount shown as FE

Quizplus · Accepted Answer

The profit per unit for a monopolist is the difference between the price they charge and the marginal cost of production, which is represented by the distance between the demand curve and the marginal cost curve at the quantity produced. In this case, it's the vertical distance between the price (point H on the price axis) and the marginal cost (point F on the cost axis) at the monopolist's output level, hence HF.

Figure 11-2 -For the Monopolist Show in Figure 11-2, How Much Profit