Which of the following formulas correctly measures the profit of a monopoly?
A) π = TR - TC
B) π = (P - ATC)Q
C) π = (P - AVC)Q
D) π = TR - TC and π = (P - ATC)Q

Question

Quizplus · Accepted Answer

Profit (π) for a monopoly is calculated as total revenue (TR) minus total cost (TC), which is option A. It can also be expressed as (P - ATC)Q, where P is price, ATC is average total cost, and Q is quantity, which is option B. Therefore, both A and B are correct, making option D the correct choice.

Which of the Following Formulas Correctly Measures the Profit of a Monopoly