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 that there are no fixed costs and AC = MC = $200.At the profit-maximizing output and price for a monopolist,producer surplus is:
A)$3,200.
B)$6,400.
C)$1,000.
D)$1,600.

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 that there are no fixed costs and AC = MC = $200.At the profit-maximizing output and price for a monopolist,producer surplus is:
A)$3,200. 
B)$6,400. 
C)$1,000. 
D)$1,600.

Quizplus · Accepted Answer

Producer surplus is calculated as (Price - MC) * Quantity. If AC = MC = $200, and assuming the monopolist sets a price above $200, the producer surplus would be the area above the MC curve and below the price line up to the profit-maximizing quantity. Without specific price and quantity values, the given answer choice of $3,200 is assumed to be correct based on the context provided.

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