What are the profits of the monopoly in equilibrium?
A)$225.
B)$120.
C)$345.
D)None of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

In a monopoly, profits in equilibrium are maximized when marginal revenue (MR) equals marginal cost (MC). From the graph, the point where MR intersects MC is at a quantity of 3, and at this quantity, the price is $75. Therefore, the total revenue (TR) is $225 (3 x $75). The total cost (TC) at a quantity of 3 is $100, so the profit is TR - TC, which is $225 - $100 = $125. Therefore, the correct answer is A) $225, which represents the total revenue earned by the monopolist at the profit-maximizing quantity.

What Are the Profits of the Monopoly in Equilibrium