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Price -nC ATC MR Ouantity Refer to Exhibit 23-1. If the product is produced under single-price monopoly, what do profits equa

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Answer #1

The profit maximizing level of output for a monopoly is where MR=MC. So Q1 is the desired output.

Now, to calculate the profit, we multiply this Q1 on x axis with the difference between the price and revenue on the y axis. The area we get as a result of this is P1P2CB.

So the answer is (a).

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