Figure 15-5
The following graph depicts the market situation for a monopoly pastry shop called Bearclaws.
-Refer to Figure 15-5. Based upon the information shown, what are total costs for Bearclaws, given that it maximizes profits?
A)$700.
B)$980.
C)$490.
D)$784.

Question

Figure 15-5
The following graph depicts the market situation for a monopoly pastry shop called Bearclaws. 
-Refer to Figure 15-5. Based upon the information shown, what are total costs for Bearclaws, given that it maximizes profits?
A)$700. 
B)$980. 
C)$490. 
D)$784.

Quizplus · Accepted Answer

Total costs are equal to total revenue minus total profit. At the profit-maximizing quantity, total revenue is $1,474 and total profit is $490. Therefore, total costs are $1,474 - $490 = $984.

Figure 15-5 The Following Graph Depicts the Market Situation for a Monopoly