Exhibit 7-12 Marginal revenue and cost per unit curves

-As shown in Exhibit 7-12,if the price is OB,the firm's total cost of producing at its most profitable level of output is:

Question

Exhibit 7-12 Marginal revenue and cost per unit curves
 
-As shown in Exhibit 7-12,if the price is OB,the firm's total cost of producing at its most profitable level of output is:

Quizplus · Accepted Answer

At the price of OB, the firm will produce output level of XL, as this is where marginal revenue (MR) equals marginal cost (MC). At this level of output, the firm's total cost is represented by the rectangle OYFB. Therefore, the correct answer is option C.

Exhibit 7-12 Marginal Revenue and Cost Per Unit Curves