Figure 8-B
-Refer to Figure 8-B.The region bounded by P*ABC represents:
A)total costs.
B)total losses.
C)total profits.
D)total consumer surplus.
E)total producer surplus.

Question

Figure 8-B 
-Refer to Figure 8-B.The region bounded by P*ABC represents:
A)total costs. 
B)total losses. 
C)total profits. 
D)total consumer surplus. 
E)total producer surplus.

Quizplus · Accepted Answer

The region bounded by P*ABC represents total profits. This is because it represents the area between the demand curve and the supply curve, which represents the total revenue and total costs respectively. The shaded area above the supply curve and below the price represents the producer surplus, while the shaded area below the demand curve and above the price represents the consumer surplus. Therefore, the remaining area between the two curves represents the total profits.

Figure 8-B -Refer to Figure 8-B.The Region Bounded by P*ABC Represents