Question

Suppose MR = MC = $3 at an output level of 2,000 units.
If a monopolist produces and sells 2,000 units, charging a price of $6 per unit and incurring average total cost of $4 per unit, the monopolist will earn profit equal to _______.

Answer 1

Answer:

Profit = $4000

Explanation:

Fo a monopoly, the total profit is maximized where the marginal revenue is equal to the marginal cost

The profit is equal to the amount by which the revenue is exceed the cost .

Profit = Total revenue - total cost

Profit = (2000× $6) - (2000× $4)

Profit = $4,000

Answer 2

Answer:

profit = TR-TC

Explanation:

Profit = 2000*6-2000*4 = 4000