Exhibit 10.4

-Exhibit 10.4 shows the demand,marginal revenue,and cost curves for a monopolistic competitor.At the profit-maximizing output level,the total cost incurred by the firm is approximately _____

Question

Exhibit 10.4
 
-Exhibit 10.4 shows the demand,marginal revenue,and cost curves for a monopolistic competitor.At the profit-maximizing output level,the total cost incurred by the firm is approximately _____

Quizplus · Accepted Answer

At the profit-maximizing output level, the firm produces where MR=MC. From the graph, we can see that this occurs at approximately 40 units of output. At this level of output, the demand curve intersects the marginal revenue curve, which is about $123.50. The corresponding point on the total cost curve is about $4,940. Therefore, the answer is (D) $4,940.

Exhibit 10.4 -Exhibit 10.4 Shows the Demand,marginal Revenue,and Cost Curves for a Cost