Figure 10-2
Figure 10-2 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 10-2.If the firm's average total cost curve is ATC₁,the firm will
A) suffer a loss.
B) break even.
C) make a profit.
D) face competition.

Question

Figure 10-2
  Figure 10-2 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 10-2.If the firm's average total cost curve is ATC₁,the firm will
A) suffer a loss. 
B) break even. 
C) make a profit. 
D) face competition.

Quizplus · Accepted Answer

If the firm's average total cost curve is ATC₁ and it is below the price level at which the firm is selling its product, the firm will make a profit because its costs are lower than its revenues.

Figure 10-2 Figure 10-2 Above Shows the Demand and Cost