The following figure shows the average cost curve, demand curve, and marginal revenue curve for a monopolist.
After maximizing profits, what do the firm's costs equal?
A) the area of rectangle ABGH
B) the area of rectangle BDEG
C) the area of rectangle ACFH
D) the area of rectangle ADEH

Question

Quizplus · Accepted Answer

The firm's costs equal the area of rectangle ABGH because it represents the average cost per unit (height) multiplied by the quantity produced (width).

The Following Figure Shows the Average Cost Curve, Demand Curve