Suppose a monopolist faces the demand curve and cost curves shown below. FIGURE 10-5
-Refer to Figure 10-5.If the single-price monopolist is producing at the profit-maximizing level of output,the total cost is represented by the area

Question

Suppose a monopolist faces the demand curve and cost curves shown below.  FIGURE 10-5
-Refer to Figure 10-5.If the single-price monopolist is producing at the profit-maximizing level of output,the total cost is represented by the area

Quizplus · Accepted Answer

The total cost at the profit-maximizing level of output is equal to the area of the rectangle defined by the intersection of the quantity produced and the average total cost curve (i.e. P₂b).

Suppose a Monopolist Faces the Demand Curve and Cost Curves