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JAMB Economics 2013 Question 23

Question 23

Theory of Costs and Revenue

Use the graph below to answer the question.
From the graph above, R represents

Diagram for this question
  1. A.marginal cost.
  2. B.total cost.
  3. C.variable cost.
  4. D.fixed cost.
Show the answer and explanation

Answer: B (total cost.)

Explanation

T is flat (fixed cost) and M starts at zero (variable cost). R has the same shape as M but starts at the fixed-cost level, so it is total cost = fixed + variable.