On a graph of a company's cost, revenue, and demand curves, the company's profit margin can be identified as the gap between _____ and _____ for a given quantity.
A)price; marginal revenue
B)price; average cost
C)marginal revenue; marginal cost
D)marginal revenue; average cost

Question

Quizplus · Accepted Answer

Profit margin is the difference between the revenue and cost. Therefore, it can be identified as the gap between the price (on the demand curve) and the average cost (on the cost curve) for a given quantity.

On a Graph of a Company's Cost, Revenue, and Demand