For a monopoly ﬁrm, the vertical distance between the demand curve and average cost curve _____.
A) gives the per unit proﬁt at that level of output
B) gives the total value of the proﬁt earned by the ﬁrm
C) is maximized when the price charged by the ﬁrm equals the average ﬁxed cost of producing the last unit
D) is equal to the vertical distance between the ﬁrm's total cost and total revenue curve at

Question

Quizplus · Accepted Answer

The vertical distance between the demand curve and the average cost curve represents the per unit profit at a given level of output, as it shows the difference between the price a firm can charge (as given by the demand curve) and the average cost of producing that output.

For a Monopoly ﬁRm, the Vertical Distance Between the Demand