Exhibit 10-7 At the profit-maximizing output level, total cost for the firm in Exhibit 10-7 is approximately
A)$5, 700
B)$5, 320
C)$4, 750
D)$4, 940
E)$8, 100

Question

Exhibit 10-7  At the profit-maximizing output level, total cost for the firm in Exhibit 10-7 is approximately
A)$5, 700 
B)$5, 320 
C)$4, 750 
D)$4, 940 
E)$8, 100

Quizplus · Accepted Answer

The profit-maximizing output level is where marginal cost equals marginal revenue, which in this case is approximately 140 units. At this output level, the total cost is approximately $4,940, which can be found by looking at the point on the graph where the quantity is 140 and following it up to the total cost curve. Therefore, the answer is D) $4,940.

Exhibit 10-7 at the Profit-Maximizing Output Level, Total Cost