Sarah owns the only bakery in a small town, and she specializes in a unique type of pastry that has gained immense popularity. Due to high demand and limited competition, Sarah has a monopoly on this pastry. As a result, she can set the price at a level that maximizes her profits. Sarah is currently the sole provider of this pastry in the town, giving her significant market power in the short run. The Figure below relates to the short-run monopoly equilibrium of Sarah's bakery. Use the figure to answer the question 17 Price, Cost (Rands) 280 80 180 250 мс D=AR Quantity The monopolist profit per unit is equal to a) R100. b) R250. c) R280. d) R460.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Sarah owns the only bakery in a small town, and she specializes in a unique type of pastry that has gained
immense popularity. Due to high demand and limited competition, Sarah has a monopoly on this pastry. As a
result, she can set the price at a level that maximizes her profits. Sarah is currently the sole provider of this
pastry in the town, giving her significant market power in the short run.
The Figure below relates to the short-run monopoly equilibrium of Sarah's bakery. Use the figure to answer
the question 17
Price, Cost
(Rands)
280
80
180
250
мс
D=AR
Quantity
The monopolist profit per unit is equal to
a) R100.
b) R250.
c) R280.
d) R460.
Transcribed Image Text:Sarah owns the only bakery in a small town, and she specializes in a unique type of pastry that has gained immense popularity. Due to high demand and limited competition, Sarah has a monopoly on this pastry. As a result, she can set the price at a level that maximizes her profits. Sarah is currently the sole provider of this pastry in the town, giving her significant market power in the short run. The Figure below relates to the short-run monopoly equilibrium of Sarah's bakery. Use the figure to answer the question 17 Price, Cost (Rands) 280 80 180 250 мс D=AR Quantity The monopolist profit per unit is equal to a) R100. b) R250. c) R280. d) R460.
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