A single-price monopolist is producing 500 units of output.At that level,price is $200,and average total cost is $150.In addition,both marginal cost and marginal revenue equal $120.Which of the following statements is correct in the short run?
A)The firm has total costs of $60,000.
B)The firm could increase its profit by increasing output.
C)The firm has a profit per unit of $50.
D)The firm is suffering an economic loss of $15,000.
E)The firm is earning an economic profit of $40,000.

Question

Quizplus · Accepted Answer

The profit per unit is calculated as the difference between price and average total cost, which is $200 - $150 = $50.

A Single-Price Monopolist Is Producing 500 Units of Output