4. If the profit maximizing firm shown to the right is producing Q* units of output, it is operating where:
  1. losses equal DCBE.
  2. total variable costs equal area DPAE.
  3. profits are at their maximum value and equal CPAB.
  4. total fixed costs are equal to area 0DEQ*
  5. profits are at their maximum value and equal DPAE.

Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved