Exhibit 23-4 -Refer to Exhibit 23-4.The firm sells its product at P 1 and produces Q 1 .Given this situation,

Total cost is equal to fixed cost plus total variable cost. In this case, fixed cost is represented by area 1, and total variable cost (including both AVC and AFC) is represented by areas 2 and 3. Therefore, total cost is equal to areas 1+2+3.

Exhibit 23-4 -Refer to Exhibit 23-4.The firm sells its product at P 1 and produces Q 1 .Given this situation,

Total cost is equal to fixed cost plus total variable cost. In this case, fixed cost is represented by area 1, and total variable cost (including both AVC and AFC) is represented by areas 2 and 3. Therefore, total cost is equal to areas 1+2+3.

Solved

Exhibit 23-4 -Refer to Exhibit 23-4.The Firm Sells Its Product at P₁

Question 55

Multiple Choice

Exhibit 23-4
Exhibit 23-4 -Refer to Exhibit 23-4.The firm sells its product at P<sub>1 </sub>and produces Q<sub>1</sub>.Given this situation, A) total variable cost is equal to areas 2 + 3. B) total revenue is equal to areas 1 + 2. C) total cost is equal to areas 1 + 2 + 3. D) profit equals area 1. E) none of the above
-Refer to Exhibit 23-4.The firm sells its product at P₁and produces Q₁.Given this situation,

A) total variable cost is equal to areas 2 + 3.
B) total revenue is equal to areas 1 + 2.
C) total cost is equal to areas 1 + 2 + 3.
D) profit equals area 1.
E) none of the above

Correct Answer: