A monopolist faces an average total cost of $6 when it produces 200 units of its product.If it sells the 200 units at $8 per unit,the monopolist ________.
A) incurs a loss of $200
B) incurs a loss of $400
C) makes a profit of $200
D) makes a profit of $400

Question

Quizplus · Accepted Answer

The monopolist sells each unit for $8 and incurs a cost of $6 per unit. The profit per unit is $8 - $6 = $2. For 200 units, the total profit is 200 * $2 = $400.

A Monopolist Faces an Average Total Cost of $6 When