On a monopolistic graph, there is no economic profit at the point where which curves intersect?

• A. MR = D
• B. ATC = D
• C. Price = MC
• D. TR = TC

Answer: (B)

The key idea is that zero economic profit happens when price just covers average total cost. For a monopolist, profit per unit is price minus ATC, and total profit is (P − ATC) times quantity. When P = ATC, that difference is zero, so total profit is zero. Since the price is set by the demand curve at the chosen quantity, this zero-profit point occurs where the demand curve intersects the ATC curve. The other conditions describe different concepts: MR = MC is the profit-maximizing rule for a monopoly, not the zero-profit condition; price equals MC is a condition for perfect competition; and TR equals TC would show zero profit in total terms but isn’t the standard way the monopoly diagram identifies the zero-profit point.