Graph 14-4
The graph depicts the cost structure of a firm in a competitive market. Use the graph to answer the following question(s) .
-Refer to Graph 14-4. When market price is P₅, a profit-maximising firm's profits can be represented by the area:

Question

Graph 14-4

The graph depicts the cost structure of a firm in a competitive market. Use the graph to answer the following question(s) .
-Refer to Graph 14-4. When market price is P₅, a profit-maximising firm's profits can be represented by the area:

Quizplus · Accepted Answer

The profit is calculated as (Price - Average Total Cost) * Quantity. If P₅ is above P₄ (the ATC), the profit is (P₅ - P₄) * Q₃.

Graph 14-4 the Graph Depicts the Cost Structure of a of a Firm