Suppose that the total profit earned by a monopolist $100. It also is known that the monopolist sells 50 units of output at a price of $10 per unit. Given this information, we can conclude that the average total cost of producing 50 units is:

Question

Quizplus · Accepted Answer

The total revenue is 50 units * $10 = $500. The total profit is $100, so total cost is $500 - $100 = $400. The average total cost is $400 / 50 units = $8.

Suppose That the Total Profit Earned by a Monopolist $100