Exhibit 13-1 Refer to Exhibit 13-1.If the firm is profit maximizing,the region bounded by CADE represents:

Question

Exhibit 13-1  Refer to Exhibit 13-1.If the firm is profit maximizing,the region bounded by CADE represents:

Quizplus · Accepted Answer

The region bounded by CADE represents the total revenue generated by the firm (represented by the rectangle CDEF) minus the total variable costs (represented by the triangle ABE). Therefore, if the firm is profit maximizing, it would produce the output level where marginal revenue (MR) equals marginal cost (MC), which in this case is at point E. At this output level, the firm will have total profits represented by the rectangle CDEG. Therefore, the region bounded by CADE represents total profits, and the correct answer is C.