Figure 9-4 Figure 9-4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches.
-Refer to Figure 9-4.What is the area that represents the loss made by the firm?

Question

Figure 9-4  Figure 9-4 shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches.
-Refer to Figure 9-4.What is the area that represents the loss made by the firm?

Quizplus · Accepted Answer

The area P₂cdP₃ represents the loss made by the firm as it is the area where the firm's total cost exceeds its total revenue.

Figure 9-4 Figure 9-4 Shows Short-Run Cost and Demand