Consider the following short-run cost curves for a profit-maximizing firm in a perfectly competitive industry. FIGURE 9-2
-Refer to Figure 9-2.If the price is $6 and the firm is producing at its profit-maximizing output,then total costs for the firm are
A)$100.
B)$300.
C)$1600.
D)$2400.
E)$3500.

Question

Consider the following short-run cost curves for a profit-maximizing firm in a perfectly competitive industry.  FIGURE 9-2
-Refer to Figure 9-2.If the price is $6 and the firm is producing at its profit-maximizing output,then total costs for the firm are
A)$100. 
B)$300. 
C)$1600. 
D)$2400. 
E)$3500.

Quizplus · Accepted Answer

Total costs are equal to total variable costs plus total fixed costs. At the profit-maximizing output, total variable costs are equal to total revenue, which is $600. Total fixed costs are $1000. Therefore, total costs are $1600.

Consider the Following Short-Run Cost Curves for a Profit-Maximizing Firm