Profit on a monopoly graph is equal to

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Prepare for the OnRamps Economics College Exam with detailed multiple-choice questions and explanations. Strengthen your understanding and boost your performance!

Multiple Choice

Profit on a monopoly graph is equal to

Explanation:
Profit equals total revenue minus total cost. In a monopoly setting, total revenue is price times quantity (TR = P × Q) and total cost is average total cost times quantity (TC = ATC × Q). So profit is TR − TC = (P − ATC) × Q, the amount by which revenue exceeds cost for the produced quantity. The other options point to revenue alone (not profit), marginal profit (the change from producing one more unit), or a per-unit cost difference that doesn’t measure total profit.

Profit equals total revenue minus total cost. In a monopoly setting, total revenue is price times quantity (TR = P × Q) and total cost is average total cost times quantity (TC = ATC × Q). So profit is TR − TC = (P − ATC) × Q, the amount by which revenue exceeds cost for the produced quantity. The other options point to revenue alone (not profit), marginal profit (the change from producing one more unit), or a per-unit cost difference that doesn’t measure total profit.

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