The following graph shows the demand and cost curves of an imperfectly competitive firm.MC and ATC represent the marginal cost curve and the average cost curve respectively. Figure 22.1 Refer to Figure 22.1.At price P₁ the firm sells quantity Q₁, and total revenue is shown by: A)the rectangle ABCD. B)the rectangle ABEF. C)the rectangle FECD. D)the distance AB. E)the distance BC.

Question

Quizplus · Accepted Answer

At price P₁, the quantity sold by the firm is Q₁. The total revenue earned by the firm is equal to the rectangle ABCD. This can be calculated as the product of price and quantity, i.e., P₁ x Q₁.

The Following Graph Shows the Demand and Cost Curves of an Imperfectly