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AP® Microeconomics

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Moderate

Monopoly Profit Comparison

APMICR-GJGMAY

Other things equal, which of the following firms would earn the highest economic profit?

A

Sola’s Panel & Drapes, a regulated monopolist charging a price equal to marginal cost.

B

Sophie’s Choice Apparel, a regulated monopolist charging a price equal to average total cost.

C

Suzie Q’s Kennel, an unregulated monopolist charging a price equal to marginal cost.

D

A Penny for Your Thoughts bookstore, an unregulated, non-discriminating monopolist.

E

Maile’s Mediation & Meditation, an unregulated monopolist which is able to engage in price discrimination.