The following figure shows the marginal cost curve and the average total cost curve of a firm operating in a perfectly competitive market.

-Refer to the figure above.Suppose the price in this market is $5.What is the total cost of the firm,when it produces the profit-maximizing level of output?
A) $600
B) $1,200
C) $2,800
D) $2,400

Question

The following figure shows the marginal cost curve and the average total cost curve of a firm operating in a perfectly competitive market.
 
-Refer to the figure above.Suppose the price in this market is $5.What is the total cost of the firm,when it produces the profit-maximizing level of output?
A) $600 
B) $1,200 
C) $2,800 
D) $2,400

Quizplus · Accepted Answer

The profit-maximizing level of output occurs where marginal cost equals marginal revenue. Assuming the figure shows this intersection at a quantity where the total cost is $2,800, option C is correct.

The Following Figure Shows the Marginal Cost Curve and the Average