Figure 15-5
-Refer to Figure 15-5. A profit-maximizing monopoly's profit is equal to
A)P2 x Q3.
B)(P2-P4) x Q3.
C)(P2-P5) x Q3.
D)(P1-P6) x Q1.

Question

Figure 15-5 
-Refer to Figure 15-5. A profit-maximizing monopoly's profit is equal to
A)P2 x Q3. 
B)(P2-P4) x Q3. 
C)(P2-P5) x Q3. 
D)(P1-P6) x Q1.

Quizplus · Accepted Answer

The profit-maximizing monopoly's profit is equal to total revenue (TR) minus total cost (TC). In this figure, the monopoly's total revenue is represented by the shaded rectangle P2P5FE, and the total cost is represented by the shaded rectangle P1P6FD. Profit is the difference between the two, which is equal to (P2-P5) x Q3. Therefore, the best choice is C.

Figure 15-5 -Refer to Figure 15-5. a Profit-Maximizing Monopoly's Profit Is Equal