Having determined the profit maximizing price and output for a monopolist, we need to see if it is actually earning a profit.

    The graph to the right shows a profitable monopolist. Since P* x Q* is total revenue and ATC* x Q* is total cost, the difference (shown as the shaded area) is profit.

    Another way to see this is to recognize that P* - ATC* is "average profit" (profit averaged over number of units sold) so (P* - ATC*) x Q* also gives profit.

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