In the Above Diagram the Profit Maximizing Output Level Is

question 46

Multiple Choice

In the above diagram the profit maximizing output level is

• A)OA
• B)OB
• C)OC
• D)It is impossible to say

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Definitions:

Marginal Cost (MC)

The extra (additional) cost of producing 1 more unit of output; equal to the change in total cost divided by the change in output (and, in the short run, to the change in total variable cost divided by the change in output).

Total Cost

The sum of all costs incurred by a business in the production of goods or services, including both fixed and variable costs.

Marginal Cost

The additional cost incurred from producing one more unit of a good or service.

Average Total Cost

A firm’s total cost divided by output (the quantity of product produced); equal to average fixed cost plus average variable cost.