Exhibit 8-14 In Exhibit 8-14, what area represents total revenue at the loss-minimizing output?

Question

Exhibit 8-14  In Exhibit 8-14, what area represents total revenue at the loss-minimizing output?

Quizplus · Accepted Answer

At the point of loss-minimizing output, total revenue is maximized but still less than total cost. This point can be observed where the marginal revenue and marginal cost curves intersect and the vertical line from this intersection point intersects the total revenue curve. In Exhibit 8-14, this intersection point is on the x-axis at the output level where the marginal cost curve intersects the x-axis. The corresponding point on the total revenue curve is 0efa. Therefore, the area representing total revenue at the loss-minimizing output is represented by 0efa.

Exhibit 8-14 in Exhibit 8-14, What Area Represents Total