Figure 15-19
-Refer to Figure 15-19. If there are no fixed costs of production, monopoly profit without price discrimination equals
A)$0.
B)$1,562.50.
C)$3,125.
D)$6,250.

Question

Figure 15-19 
-Refer to Figure 15-19. If there are no fixed costs of production, monopoly profit without price discrimination equals
A)$0. 
B)$1,562.50. 
C)$3,125. 
D)$6,250.

Quizplus · Accepted Answer

Monopoly profit is maximized where MR=MC. In this case, that occurs at a quantity of 25 units, where P=$125. Total revenue at that point is $3,125 and total cost is $0 (since there are no fixed costs). Therefore, monopoly profit is $3,125.

Figure 15-19 -Refer to Figure 15-19. If There Are No Fixed Costs