The table given below reports the marginal revenue and marginal cost of Holmes Detective Agency for each client.Table 9.2

-Graphically, a firm's profit per unit of output can be found by:
A)the triangle formed under the demand curve.
B)the rectangle formed under the demand curve at a given price and quantity combination.
C)the rectangle formed under the average-total-cost curve at a given ATC and quantity combination.
D)the distance between the demand and average-total-cost curves at any level of output.
E)the distance between the horizontal axis and the average-total-cost curves at any level of output.

Question

The table given below reports the marginal revenue and marginal cost of Holmes Detective Agency for each client.Table 9.2
 
-Graphically, a firm's profit per unit of output can be found by:
A)the triangle formed under the demand curve. 
B)the rectangle formed under the demand curve at a given price and quantity combination. 
C)the rectangle formed under the average-total-cost curve at a given ATC and quantity combination. 
D)the distance between the demand and average-total-cost curves at any level of output. 
E)the distance between the horizontal axis and the average-total-cost curves at any level of output.

Quizplus · Accepted Answer

The profit per unit of output for a firm is equal to the difference between the price and the average total cost (ATC) of producing that unit. This can be found graphically by calculating the distance between the demand curve and the ATC curve at any given level of output. Therefore, the correct choice is D) the distance between the demand and average-total-cost curves at any level of output. Choices A, B, C, and E do not accurately represent the calculation of profit per unit of output.

The Table Given Below Reports the Marginal Revenue and Marginal