Total cost on a monopoly graph is found by

• A. quantity where MC = MR times where it goes up to ATC
• B. price x quantity
• C. total revenue minus total cost
• D. the area triangle above price

Answer: (A)

Total cost is found by using the quantity produced in the profit-maximizing decision and the average total cost at that output. In a monopoly, the firm sets output where MR equals MC. At that quantity, total cost equals ATC at that Q times Q, because TC = ATC × Q. So you read the Q where MR = MC, look at ATC at that Q, and multiply by Q to get TC. The other ideas mix up revenue or areas on the graph that don’t represent total cost.