If the profit-maximizing output level of a monopoly firm is q=50, the demand curve is p= 20 -0.1q and ATC at the output level of 50 is Rs 7, what is the total profit?

Rs 350

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Rs 400

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Rs 800

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Rs 1000

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Solution

The correct option is B
Rs 400

$A t q = 50, p = 20 - 0.1 \times 50 = R s 15 P r o f i t = (P - A T C) \times q = (15 - 7) \times 50 = 8 \times 50 = R s 400$

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If the profit-maximizing output level of a monopoly firm is q=50, the demand curve is p= 20 -0.1q and ATC at the output level of 50 is Rs 7, what is the total profit?

The correct option is B Rs 400 At q=50, p=20−0.1×50=Rs 15Profit=(P−ATC)×q=(15−7)×50=8×50=Rs 400

The correct option is B
Rs 400

$A t q = 50, p = 20 - 0.1 \times 50 = R s 15 P r o f i t = (P - A T C) \times q = (15 - 7) \times 50 = 8 \times 50 = R s 400$