Use the following to answer question(s): Computing Monopoly Profit

-(Exhibit: Computing Monopoly Profit) Total economic profit at the profit-maximizing level of output is:
A) EF.
B) EF times Q.
C) price minus average total cost times the quantity where MR = MC.
D) described by B and C.

Question

Use the following to answer question(s): Computing Monopoly Profit
 
-(Exhibit: Computing Monopoly Profit) Total economic profit at the profit-maximizing level of output is:
A) EF. 
B) EF times Q. 
C) price minus average total cost times the quantity where MR = MC. 
D) described by B and C.

Quizplus · Accepted Answer

Both B and C accurately describe how to calculate total economic profit at the profit-maximizing level of output in a monopoly. B) EF times Q represents the area of profit (where EF is the per-unit profit and Q is the quantity), and C) price minus average total cost times the quantity where MR = MC is the formulaic expression of calculating economic profit, where you subtract average total cost from the price at the quantity where marginal revenue equals marginal cost.

Use the Following to Answer Question(s): Computing Monopoly Profit