Use the following to answer question:
Figure: The Profit-Maximizing Output and Price
-(Figure: The Profit-Maximizing Output and Price)Use Figure: The Profit-Maximizing Output and Price.Assume there are no fixed costs and AC = MC.At the profit-maximizing quantity of production for the monopolist,total revenue is _____,total cost is _____,and profit is _____.
A)$600;$200;$400
B)$1,600;$3,200;$1,600
C)$4,800;$3,200;$1,600
D)$4,800;$1,600;$3,200

Question

Use the following to answer question:
Figure: The Profit-Maximizing Output and Price 
-(Figure: The Profit-Maximizing Output and Price)Use Figure: The Profit-Maximizing Output and Price.Assume there are no fixed costs and AC = MC.At the profit-maximizing quantity of production for the monopolist,total revenue is _____,total cost is _____,and profit is _____.
A)$600;$200;$400 
B)$1,600;$3,200;$1,600 
C)$4,800;$3,200;$1,600 
D)$4,800;$1,600;$3,200

Quizplus · Accepted Answer

At the profit-maximizing quantity of production, the monopolist produces 4 units of output where marginal revenue (MR) is equal to marginal cost (MC) and charges a price of $1,200 per unit. 
Therefore, total revenue is 4 * $1,200 = $4,800.
Total cost is the sum of total variable cost and total fixed cost, which is equal to total variable cost since there are no fixed costs. At 4 units of output, total variable cost is $1,600 (point B on the graph).
Profit is total revenue minus total cost, which is $4,800 - $1,600 = $3,200.

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