Graphically, a firm's 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.
c
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Option A provides $9,000 with probability 50 percent or $11,000 with probability 50 percent. Option B provides $8,000 with probability 50 percent or $12,000 with probability 50 percent. For most people the cost of risk associated with B is
A) less than that associated with A. B) the same as that associated with A. C) exactly twice that associated with A. D) more than twice that associated with A.
Assume that banks lend out all their excess reserves. Currently, the legal reserves that banks must hold equal $11.5 billion. If the Federal Reserve decreases its reserve requirement from 10 percent to 5 percent, then there is potential for the whole banking system to raise the money supply by:
a. $11.5 billion. b. $230 billion. c. $115 billion. d. $57.5 billion. e. $575 billion.