Can you explain what the boxes mean?There is the big box (3+2+1), 1+2, 2+3, and 1,2,and 3 on their own.Moreover, is my answer correct? The image presents a graph depicting Price and Cost on the vertical axis and Quantity on the horizontal axis. Key elements of the graph include:- Horizontal line at price level $ P_1 $, which intersects the vertical axis representing the firm's selling price and the demand/marginal revenue curve ($ d, MR $).- Horizontal lines indicating Average Total Cost (ATC) and Average Variable Cost (AVC), positioned above $ P_1 $.- Three distinct areas on the graph: 1. Area 1: Below $ P_1 $. 2. Area 2: Between $ P_1 $ and AVC. 3. Area 3: Between AVC and ATC.Accompanying the graph is a question:"Refer to Exhibit 22-4. The firm sells its product at $ P_1 $ and produces $ Q_1 $. Given this situation,a. Total variable cost is equal to area 2 + area 3.b. Total revenue is equal to area 1 + area 2.c. Profit equals area 1.d. Total cost is equal to area 1 + area 2 + area 3."The correct option indicated is:d. Total cost is equal to area 1 + area 2 + area 3.

find below the answer.answer: Total cost is area 1 + 2 + 3 (option d) Total revenue is only represented by area 1 and total variable cost is area 1 + area 2. ATC * Q will give the total cost which is given in the area covered by 3,2,1.

Business

Economics

ATC AVC 0, Quantity Refer to Exhibit 22-4. The firm sells its product at P1 and produces Q1. Given this situation, O a. total variable cost is equal to area 2 + area 3. O b. total revenue is equal to area 1+ area 2. c. profit equals area 1. a d. total cost is equal to area 1 + area 2 + area 3. Price and Cost

ATC AVC 0, Quantity Refer to Exhibit 22-4. The firm sells its product at P1 and produces Q1. Given this situation, O a. total variable cost is equal to area 2 + area 3. O b. total revenue is equal to area 1+ area 2. c. profit equals area 1. a d. total cost is equal to area 1 + area 2 + area 3. Price and Cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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