Table of contents

0. Basic Principles of Economics1h 5m
1. Reading and Understanding Graphs59m
2. Introductory Economic Models1h 10m
3. The Market Forces of Supply and Demand2h 26m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
6. Introduction to Taxes and Subsidies1h 46m
7. Externalities1h 12m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. The Costs of Production2h 35m
11. Perfect Competition2h 23m
12. Monopoly2h 13m
13. Monopolistic Competition1h 9m
14. Oligopoly1h 26m
15. Markets for the Factors of Production1h 26m
16. Income Inequality and Poverty35m
17. Asymmetric Information, Voting, and Public Choice39m
18. Consumer Choice and Behavioral Economics1h 16m

12. Monopoly

Monopoly Profit on the Graph

Microeconomics

12. Monopoly

Monopoly Profit on the Graph

Previous problemNext problem

Struggling with Microeconomics?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

At this monopolist's profit-maximizing output:

Price equals marginal revenue

Price equals marginal cost

Price exceeds marginal cost

Profit per unit is maximized

Previous problemNext problem

Verified step by step guidance

Identify the key curves on the graph: Demand (D), Marginal Revenue (MR), Marginal Cost (MC), and Average Total Cost (ATC).

Recall that a monopolist maximizes profit by producing the quantity where Marginal Revenue (MR) equals Marginal Cost (MC). Locate this intersection point on the graph.

At the profit-maximizing quantity, draw a vertical line up to the Demand curve to determine the price the monopolist will charge.

Note that at this quantity, the price (from the Demand curve) is greater than the Marginal Cost (MC), which is a characteristic of monopoly pricing.

Understand that the difference between price and marginal cost indicates that price exceeds marginal cost, confirming the statement that at the monopolist's profit-maximizing output, price exceeds marginal cost.