Figure 8-A
-Refer to Figure 8-A.If the firm is profit maximizing, the region bounded by CADE represents:
A)total costs.
B)total losses.
C)total profits.
D)total consumer surplus.

Question

Figure 8-A 
-Refer to Figure 8-A.If the firm is profit maximizing, the region bounded by CADE represents:
A)total costs. 
B)total losses. 
C)total profits. 
D)total consumer surplus.

Quizplus · Accepted Answer

The region bounded by CADE represents total revenue. The firm will produce where Marginal Cost (MC) equals Marginal Revenue (MR) and the quantity of output is where this point intersects the demand curve. The shaded area below the demand curve (price) and above the MC curve represents profit. Therefore, the region bounded by CADE represents total profits.

Figure 8-A -Refer to Figure 8-A.If the Firm Is Profit Maximizing, the Profit