Exhibit 8-12 Marginal revenue and cost per unit curves
-As shown in Exhibit 8-12, if the price is OB, the firm's total cost of producing at its most profitable level of output is:

Question

Exhibit 8-12 Marginal revenue and cost per unit curves 
-As shown in Exhibit 8-12, if the price is OB, the firm's total cost of producing at its most profitable level of output is:

Quizplus · Accepted Answer

At price OB, the firm's profit-maximizing level of output is where marginal revenue (MR) equals marginal cost (MC), which is at point E. At this level of output, the firm's total cost is OYFB, which is the sum of fixed cost (OF) and variable cost (YFB). Therefore, the correct answer is option C.

Exhibit 8-12 Marginal Revenue and Cost Per Unit Curves