Short-Run Equilibrium Of A Monopoly:

The monopoly attains its profit-maximizing objective by following exactly the same rule as the perfectly competitive firm - that is, adjusting its rate of production to the point where marginal cost (MC) is equal to marginal revenue (MR)

FIGURE: Short-Run Profit maximizing position for a monopoly

Figure illustrates the case of a monopoly firm that earns supernormal profit (i.e. positive economic profits) in the short-run by producing output Q1 where SMC equals MR., since price. (P1) is greater than short-run average cost (SAC). The area of the shaded rectangle P1 ABC gives the magnitude of monopolist's profits.