The area under the supply curve represents _____.
A)the variable cost of producing the good or service
B)the fixed cost of producing the good or service
C)the marginal value to the firm from producing the good or service
D)the total revenue earned by the firm from selling the good or service

Question

Quizplus · Accepted Answer

The area under the supply curve represents the variable cost of producing the good or service. This is because the supply curve typically reflects the marginal cost of production, which includes variable costs that change with the level of output. Fixed costs, on the other hand, do not vary with output and are not represented by the supply curve. The marginal value to the firm and total revenue are related to the demand side and the price at which goods are sold, not the costs represented by the supply curve.

The Area Under the Supply Curve Represents _____