Economists who study production of goods by a firm consider two functions. The revenue function R(x) is the revenue the firm receives when a number of units are sold. The cost function C(x) is the cost the firm incurs when producing æ number of units. The derivatives of these functions R'(xæ) and C'(x) are called by economists the marginal revenue and cost function. The figure shows graphs of the marginal revenue function R' and the marginal cost function C' for a manufacturer. YA R'(x) 3 C'(x) 1 50 100 What does the shaded area in the figure represent? DA. The total revenue generated by the manufacturer. OB. The increase in profit as the production level increases from 50 to 100 units. OC. The total profit that the manufacturer earns. OD. The increase in revenue as the production level increases from 50 to 100 units. DE. The total cost generated by the manufacturer. F. The increase in cost as the production level increases from 50 to 100 units.

Economists who study production of goods by a firm consider two functions. The revenue function R(x) is the revenue the firm receives when a number of units are sold. The cost function C(x) is the cost the firm incurs when producing æ number of units. The derivatives of these functions R'(xæ) and C'(x) are called by economists the marginal revenue and cost function. The figure shows graphs of the marginal revenue function R' and the marginal cost function C' for a manufacturer. YA R'(x) 3 C'(x) 1 50 100 What does the shaded area in the figure represent? DA. The total revenue generated by the manufacturer. OB. The increase in profit as the production level increases from 50 to 100 units. OC. The total profit that the manufacturer earns. OD. The increase in revenue as the production level increases from 50 to 100 units. DE. The total cost generated by the manufacturer. F. The increase in cost as the production level increases from 50 to 100 units.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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