Figure 11.3

Figure 11.3 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches.
-Refer to Figure 11.3.What is the area that represents the total variable cost of production?

Question

Figure 11.3
  
Figure 11.3 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches.
-Refer to Figure 11.3.What is the area that represents the total variable cost of production?

Quizplus · Accepted Answer

The area that represents the total variable cost of production is the triangle bounded by the y-axis, the marginal cost curve (MC), and the quantity produced (Qa). This is represented by the area 0P₁bQₐ.

Figure 11.3 Figure 11.3 Shows Short-Run Cost and Demand Curves for a and Demand