The following figure shows the revenue and cost curves of a monopolist. Figure 10.3 D: Average Revenue
MR: Marginal Revenue
ATC: Average Total Cost
MC: marginal Cost
-Consider the monopolist described in the Figure 10.3.If the firm engages in profit-maximizing behavior,economic profit per unit of output will be:

Question

The following figure shows the revenue and cost curves of a monopolist. Figure 10.3

D: Average Revenue
MR: Marginal Revenue
ATC: Average Total Cost
MC: marginal Cost
-Consider the monopolist described in the Figure 10.3.If the firm engages in profit-maximizing behavior,economic profit per unit of output will be:

Quizplus · Accepted Answer

The monopolist will produce at the output level where marginal revenue equals marginal cost. At this output level, the price will be P2, and the average total cost will be P2. Therefore, economic profit per unit of output will be 0.

The Following Figure Shows the Revenue and Cost Curves of a Monopolist