Suppose that a perfect-maximizing monopolist operates with a horizontal marginal cost curve and no fixed costs. Which of the following would NOT be represented as part of the area between its demand curve and marginal cost curve?

Question

Quizplus · Accepted Answer

Since the monopolist operates with a horizontal marginal cost curve and no fixed costs, its total costs are constant and would not change with changes in output. Therefore, total costs would not be represented as part of the area between its demand curve and marginal cost curve. However, economic profits, consumer surplus, and deadweight loss would all be represented as part of this area.

Suppose That a Perfect-Maximizing Monopolist Operates with a Horizontal Marginal