Below is a graphical illustration of a typical firm operating in a monopolistically competitive industry:

-Refer to the graph above to answer this question.What area graphically represents a profit-maximizing firm's total profits or loss?

Question

Below is a graphical illustration of a typical firm operating in a monopolistically competitive industry:
 
-Refer to the graph above to answer this question.What area graphically represents a profit-maximizing firm's total profits or loss?

Quizplus · Accepted Answer

The area representing a profit-maximizing firm's total profits is the difference between total revenue and total cost. In the graph, this is shown by the area P₃P₅FG, where P₃P₅ is the price level and FG is the cost level.

Below Is a Graphical Illustration of a Typical Firm Operating