It is TR-TC. If the **monopolist’s average cost** is greater than the **price** of its product, the firm would suffer a loss. In the right-hand graph, the firm’s **average cost** curve is greater than **price**, and it is losing money. **Total cost** is AC* x Q*m, but **total revenue** is only P*m x Q*m, so TC>TR.

**Click to read full answer. Similarly, it is asked, how do you calculate average total cost?**

**Average total cost** (ATC) is calculated by dividing **total cost** by the **total** quantity produced. The **average total cost** curve is typically U-shaped. **Average** variable **cost** (AVC) is calculated by dividing variable **cost** by the quantity produced.

One may also ask, how do you find the profit maximizing price for a monopoly? **Determine** marginal **cost** by taking the derivative of total **cost** with respect to quantity. Set marginal revenue equal to marginal **cost** and solve for q. Substituting 2,000 for q in the demand **equation** enables you to **determine price**. Thus, the **profit**–**maximizing** quantity is 2,000 units and the **price** is $40 per unit.

**Likewise, people ask, does price equal average total cost in a monopoly?**

An industry is a natural **monopoly** if a single firm can produce all of the relevant output at a lower **average total cost** than could any combination of two or more firms. This would **mean** that the firm would be required to charge a **price** that is **equal** to **average total cost**.

## Is Google a monopoly?

One analyst says “there’s zero empirical evidence” that **Google** acts as a **monopoly** and does real harm, even though “60 Minutes” put the search engine back in the antitrust crosshairs. But **Google** itself is afraid of competition — from giants like Amazon or from smaller start-ups, Pethokoukis said.

How do you calculate total revenue?

**Total revenue** is the full amount of **total** sales of goods and services. It is **calculated** by multiplying the **total** amount of goods and services sold by the price of the goods and services.

### How do monopolies make profit?

In a perfectly competitive market, price equals marginal cost and firms **earn** an economic **profit** of zero. In a **monopoly**, the price is set above marginal cost and the firm earns a positive economic **profit**. Perfect competition produces an equilibrium in which the price and quantity of a good is economically efficient.

### How do you calculate total output?

**Total output** can be measured two ways: as the sum of the values of final goods and services produced and as the sum of values added at each stage of production. GDP plus net income received from other countries equals GNP. GNP is the **measure** of **output** typically used to compare incomes generated by different economies.

### Where is profit on a monopoly graph?

The **monopolist** will charge what the market is willing to pay. A dotted line drawn straight up from the **profit**-maximizing quantity to the demand **curve** shows the **profit**-maximizing price. This price is above the average cost **curve**, which shows that the firm is earning **profits**.

### How do you work out the marginal cost?

To **calculate marginal cost**, divide the difference in total **cost** by the difference in output between 2 systems. For example, if the difference in output is 1000 units a year, and the difference in total **costs** is $4000, then the **marginal cost** is $4 because 4000 divided by 1000 is 4.

### What is the cost formula?

The **cost** equation is typically the **cost** of manufacturing and selling one item multiplied by the number of items sold and added to the company’s overhead **costs**.

### How do you find the fixed cost?

The formula used to **calculate costs** is FC + VC(Q) = TC, where FC is **fixed costs**, VC is variable **costs**, Q is quantity, and TC is total **cost**. It is important to understand that variable **costs**, as opposed to **fixed costs**, are those **costs** that change based on the amount of product being produced.

### What is the formula to calculate average cost?

In accounting, to find the **average cost**, divide the sum of variable **costs** and fixed **costs** by the quantity of units produced. It is also a method for valuing inventory. In this sense, **compute** it as **cost** of goods available for sale divided by the number of units available for sale.

### What is total cost function?

Definition: A **cost function** is a mathematical formula used to used to chart how production **expenses** will change at different output levels. In other words, it estimates the **total cost** of production given a specific quantity produced.

### What is total cost equal to?

**Total cost** is **equal to** the sum of **total** fixed **cost** and **total** variable **cost**. D. Average variable **cost** is **equal to total** variable **cost** divided by the quantity of output. Average fixed **cost** is **equal to total** fixed **cost** divided by the quantity of output.

### Which is the best example of price discrimination?

**Price discrimination**: A producer that can charge **price** Pa to its customers with inelastic demand and Pb to those with elastic demand can extract more total profit than if it had charged just one **price**. An **example of price discrimination** would be the cost of movie tickets.

### Is price equal to marginal cost?

In perfect competition, any profit-maximizing producer faces a market **price equal** to its **marginal cost** (P = MC). This implies that a factor’s **price equals** the factor’s **marginal** revenue product. At this point, **price equals** both the **marginal cost** and the average total **cost** for each good (P = MC = AC).