In Figure 24.2, total profit at the profit-maximizing rate of output is
A)CDLK.
B)CDHG.
C)ABDLK.
D)GHLK.

Question

In Figure 24.2, total profit at the profit-maximizing rate of output is
A)CDLK. 
B)CDHG. 
C)ABDLK. 
D)GHLK.

Quizplus · Accepted Answer

The profit-maximizing rate of output is where marginal revenue (MR) equals marginal cost (MC). In Figure 24.2, this occurs at point H, where the MR and MC curves intersect. At this point, the total profit is represented by the rectangle CDHG, which is the difference between total revenue (CD) and total cost (HG). Choice B, CDHG, is the only option that accurately represents the profit at the profit-maximizing rate of output.