Suppose that the profit maximizing level of output for the monopolist is 100 units, and ATC = $45.00; MC = $35.00; MR = $35.00; P = $50.00. What is the monopoly's profit?

A) -$1000
B) $4500
C) $5000
D) $500


Answer: D) $500
Q* = 100 and ATC = $45 per unit which means total cost = $45*100 = $4500
total revenue = P x Q* = $50 x 100 = $5,000
monopoly profit = total revenue - total cost = $5,000 - $4,500 = $500

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