3. Profit maximization using total cost and total revenue curvesSuppose Jayden operates a handicraft pop-up retail shop that sells rompers. Assume a perfectly competitive market structure for rompers with amarket price equal to $25 per romper.The following graph shows Jayden's total cost curve.Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for rompers for quantities zero throughseven (including zero and seven) that Jayden produces.TOTAL COST AND REVENUE (Dollars)20017515012510075509402DQUANTITY (Rompers)6Total Cost78O-Total RevenueAProfit? Calculate Jayden's marginal revenue and marginal cost for the first seven rompers they produce, and plot them on the following graph. Use the bluepoints (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity.COSTS AND REVENUE (Dollars per romper)403530252015105023QUANTITY (Rompers)67-O-Marginal RevenueMarginal CostJayden's profit is maximized when they produce a total of, an amountrompers. At this quantity, the marginal cost of the final romper they produce isthan the price received for each romper they sell. At this point, the marginal cost of producing one more romper(the first romper beyond the profit maximizing quantity) is $, an amountthan the price received for each romper they sell.Therefore, Jayden's profit-maximizing quantity occurs at the point of intersection between theBecause Jayden is a price taker, the previous condition is equivalent tocurves.

Person Jayden's profit is maximized when he produces 1. 6 units of output, where Marginal Cost is 2.…

3. Profit maximization using total cost and total revenue curves Suppose Jayden operates a handicraft pop-up retail shop that sells rompers. Assume a perfectly competitive market structure for rompers with a market price equal to $25 per romper. The following graph shows Jayden's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for rompers for quantities zero through seven (including zero and seven) that Jayden produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 50 25 10 25 0 2 3 6 QUANTITY (Rompers) 4 Total Cost O Total Revenue 4 Profit