On a diagram with quantity on the horizontal axis and price on the vertical axis, the short run per unit profit for a monopolist is a. a vertical distance. O b. the area of a rectangle. C. a horizontal distance. O d. area of a triangle.

On a diagram with quantity on the horizontal axis and price on the vertical axis, the short run per unit profit for a monopolist is a. a vertical distance. O b. the area of a rectangle. C. a horizontal distance. O d. area of a triangle.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

On a diagram with quantity on the horizontal axis and price on the vertical axis, the short run per unit profit for a monopolist is

a. a vertical distance.

b. the area of a rectangle.

c. a horizontal distance.

d. area of a triangle.

Expert Solution

Step 1

In a monopoly profit is maximized at the point where the marginal revenue curve intersects the marginal cost curve. And that quantity is the quantity produced by the monopoly.

For monopoly, the profit is:

$P r o f i t = (P m \times Q m) - T C$

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