Use the following for questions 22-31.
Exhibit: Profit Maximization in Monopolistic Competition

-(Exhibit: Profit Maximization in Monopolistic Competition) In the short run, a firm in monopolistic competition may experience economic profits as shown in Panel (a) as the distance:
A) PS.
B) PS times the quantity 0M.
C) PS times the quantity Q.
D) PT times the quantity Q.

Question

Use the following for questions 22-31.
Exhibit: Profit Maximization in Monopolistic Competition
 
-(Exhibit: Profit Maximization in Monopolistic Competition) In the short run, a firm in monopolistic competition may experience economic profits as shown in Panel (a) as the distance:
A) PS. 
B) PS times the quantity 0M. 
C) PS times the quantity Q. 
D) PT times the quantity Q.

Quizplus · Accepted Answer

In monopolistic competition, economic profit in the short run is represented by the area between the price (P) and the average total cost (S) at the quantity produced (Q), which is PS times the quantity Q.

Use the Following for Questions 22-31