Figure 9-1

-Refer to Figure 9-1. What area indicates the profit-maximizing firm's total revenue?
A) 0BGQ2
B) 0AEQ1
C) DAEF
D) 0DFQ1

Question

Figure 9-1
 
-Refer to Figure 9-1. What area indicates the profit-maximizing firm's total revenue?
A) 0BGQ2 
B) 0AEQ1 
C) DAEF 
D) 0DFQ1

Quizplus · Accepted Answer

The area labeled 0AEQ1 represents the profit-maximizing firm's total revenue because it is the rectangle formed by the intersection of the demand curve (0AE) and the quantity sold (EQ1). This area represents the total amount of money the firm receives from selling the quantity of output that maximizes profit. The other areas do not represent total revenue because they are either below or above the optimal quantity, resulting in lower amounts of revenue.

Figure 9-1 -Refer to Figure 9-1. What Area Indicates the Profit-Maximizing Firm's