-The Above Figure Shows the Demand and Cost Curves for a Monopolist

question 415

Multiple Choice

-The above figure shows the demand and cost curves for a monopolist. What is the maximum economic profit this firm can make?

• A) zero
• B) $400
• C) $100
• D) $200

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business.

Fixed Overheads

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance costs.

Estimated Total Cost

An approximation of the total cost associated with a project or production, including all relevant expenses.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, making it more useful for controlling costs and planning.