Calculate Madison's marginal revenue and marginal cost for the first seven cardigans 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 cardigan)40353000125QUANTITY (Cardigans)4678Marginal RevenueMarginal CostMadison's profit is maximized when they produce a total ofcardigans. At this quantity, the marginal cost of the final cardigan they produce is$ , an amountthan the price received for each cardigan they sell. At this point, the marginal cost of producing one morecardigan (the first cardigan beyond the profit maximizing quantity) is $, an amountthan the price received for each cardiganthey sell. Therefore, Madison's profit-maximizing quantity occurs at the point of intersection between thecurves. Because Madison is a price taker, the previous condition is equivalent to 3. Profit maximization using total cost and total revenue curvesSuppose Madison operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure for cardigans with amarket price equal to $20 per cardigan.The following graph shows Madison's total cost curve.Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for cardigans for quantities zero throughseven (including zero and seven) that Madison produces.TOTAL COST AND REVENUE (Dollars)2001751501251007525-250D12■☐435QUANTITY (Cardigans)0Total Cost6 78Total RevenueProfit(?)

Profit maximizing quantity is computed where MR=MC or the profit is maximum. For the price given:…

Calculate Madison's marginal revenue and marginal cost for the first seven cardigans they produce, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. COSTS AND REVENUE (Dollars per cardigan) 40 35 30 25 20 15 0 Madison's prof 1 2 3 5 QUANTITY (Cardigans) 4 6 7 when they produce a total of 8 Marginal Revenue O Marginal Cost (? cardigans. At this quantity the marginal cost of the final cardigan they produce i