FIGURE 10-2

-The profit-maximizing firm illustrated in Figure 10-2 operates in a monopolistically competitive industry. What is this firm's total profit equal to?

Question

FIGURE 10-2
 
-The profit-maximizing firm illustrated in Figure 10-2 operates in a monopolistically competitive industry. What is this firm's total profit equal to?

Quizplus · Accepted Answer

Total profit is calculated as total revenue minus total cost. In the graph, the area OFBD represents total revenue, and OGAD represents total cost. Therefore, the profit is the difference between these two areas, which is OFBD - OGAD.

FIGURE 10-2 -The Profit-Maximizing Firm Illustrated in Figure 10-2 Operates in a 10-2