Graphically,total cost is equal to the area of the:
A)triangle formed under the demand curve.
B)rectangle formed under the demand curve at a given price and quantity combination.
C)rectangle formed under the average-total-cost curve at a given ATC and quantity combination.
D)triangle formed by a line segment between the demand and average-total-cost curves.
E)triangle formed by a line segment between the horizontal axis and the average-total-cost curves.

Question

Quizplus · Accepted Answer

Total cost is equal to quantity multiplied by average cost. Therefore, the rectangle formed under the average-total-cost curve at a given ATC and quantity combination represents the total cost. This is because the height of the rectangle represents the average total cost and the width represents the quantity, thus the area of the rectangle is the total cost.

Graphically,total Cost Is Equal to the Area of The