Use the following to answer questions:
Figure: Costs of Oil Production
-(Figure: Costs of Oil Production) Refer to the figure. Assuming that price equals marginal cost, the total cost of producing eight barrels of oil is:

Question

Use the following to answer questions:
Figure: Costs of Oil Production 
-(Figure: Costs of Oil Production) Refer to the figure. Assuming that price equals marginal cost, the total cost of producing eight barrels of oil is:

Quizplus · Accepted Answer

The total cost of producing eight barrels of oil is equal to the area under the marginal cost curve up to eight barrels. This area is a triangle with a base of eight barrels and a height of $30. Therefore, the total cost is 1/2 * 8 * $30 = $120.

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