Exhibit 24-3 -Refer to Exhibit 24-3. Total cost of this profit maximizing monopolistic competitor is represented by the area A)0P₁AQ₂. B)0P₃CQ₂. C)P₃P₁AC. D)P₄P₁AD.

Question

Quizplus · Accepted Answer

Total cost for a profit-maximizing monopolistic competitor is the area under the average total cost curve at the profit-maximizing output level. This area is represented by the rectangle formed by the price level that intersects the average total cost curve at the profit-maximizing quantity (which is the height of the rectangle) and the quantity itself (which is the width of the rectangle).

Exhibit 24-3 -Refer to Exhibit 24-3. Total Cost of This Profit Maximizing