Use the following to answer question:
Figure: Computing Monopoly Profit
-(Figure: Computing Monopoly Profit) Use Figure: Computing Monopoly Profit.At the profit-maximizing output,total cost is:

Question

Use the following to answer question:
Figure: Computing Monopoly Profit

-(Figure: Computing Monopoly Profit) Use Figure: Computing Monopoly Profit.At the profit-maximizing output,total cost is:

Quizplus · Accepted Answer

At the profit-maximizing output, total cost is equal to P₂0QF. This is because the profit-maximizing output is where marginal cost equals marginal revenue, which occurs at point Q. The total cost at Q is found by drawing a line from Q to the total cost curve and then dropping it down to the horizontal axis. This intersects the horizontal axis at point F, which corresponds to a total cost of P₂0QF.

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