The following figure shows the average cost curve, demand curve, and marginal revenue curveP.MRAC.MCBADemandADEHDEBGCFBGACFHABGHurLHMCACMRWhat points will calculate the equilibrium total cost?Quantity

Cost is the amount of expenditure incurred on goods or services. It is incurred for the hiring of laborers, and purchasing of raw material in the production process. The volume at which a good is produced affects the costs associated with it.The correct option is option 5) The rectangle ABGH is the equilibrium total cost of the firm. Due to the initial production process, the company has chosen the average cost for its production costs. The diagram below depicts a company's monopoly market structure. The total cost is calculated as. Hence, the most accurate area representing the total cost is ABGH.Option 1) is incorrect because the rectangle is an ADEH is the firm's total revenue acquired from production.Option 2) is incorrect because DEBG in the above figure is the profit-maximizing level of output.Option 3) is incorrect, because CFBG is not the total cost of the firmOption 4) is incorrect, because the ACFH portion of the figure does not represent the total cost because it intersects at and the average cost.The correct choice is option 5) ABGH

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The following figure shows the average cost curve, demand curve, and marginal revenue curve P. MR AC. MC B Demand ADEH DEBG OCFBG O ACFH O ABGH MC AC MR What points will calculate the equilibrium total cost? Quantity

The following figure shows the average cost curve, demand curve, and marginal revenue curve P. MR AC. MC B Demand ADEH DEBG OCFBG O ACFH O ABGH MC AC MR What points will calculate the equilibrium total cost? Quantity

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Hi, I do not understand why B is the correct answer for number 3. How do I know that this monoply is earning a normal economic profit in the long run?
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