The profit-maximizing monopolist shown in the figure would

Question

Quizplus · Accepted Answer

The profit-maximizing monopolist will produce where marginal revenue (MR) equals marginal cost (MC), i.e., at output level Qm. Then, they will charge the price corresponding to the demand curve at that output level, which is equal to C. The shaded area BEDC represents the monopolist's total revenue, while the shaded area ACED represents the monopolist's total cost. Therefore, the monopolist will earn an economic profit of BEDC-ACED, which is the shaded area AFEB. Therefore, the correct answer is Option C.

The Profit-Maximizing Monopolist Shown in the Figure Would