Homework Help is Here – Start Your Trial Now!
Business
Economics
Calculate Nick's marginal revenue and marginal cost for the first seven shirts he produces, 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. 40 35 Marginal Revenue 30 Marginal Cost 0 1 3 4 5 6 7 8 QUANTITY (Shirts) Nick's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is which is than the price Nick receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is which is than the price Nick receives for each shirt he sells. Therefore, Nick's profit-maximizing quantity corresponds to the intersection of the curves. Because Nick is a price taker, this last condition can also be written as COSTS AND REVENUE (Dollars per shirt) 5 0 2 。

Calculate Nick's marginal revenue and marginal cost for the first seven shirts he produces, 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. 40 35 Marginal Revenue 30 Marginal Cost 0 1 3 4 5 6 7 8 QUANTITY (Shirts) Nick's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is which is than the price Nick receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is which is than the price Nick receives for each shirt he sells. Therefore, Nick's profit-maximizing quantity corresponds to the intersection of the curves. Because Nick is a price taker, this last condition can also be written as COSTS AND REVENUE (Dollars per shirt) 5 0 2 。

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: Firms In Competitive Markets
Section: Chapter Questions
Problem 4CQQ
See similar textbooks
icon
Related questions
Question
Calculate Nick's marginal revenue and marginal cost for the first seven shirts he produces, 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. 40 35 Marginal Revenue 30 0- 25 Marginal Cost 20 15 10 5 0 6 7 8 shirts. When he does this, the marginal cost of the last shirt he produces is $ which is than the price Nick receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would than the price Nick receives for each shirt he sells. Therefore, Nick's profit-maximizing curves. Because Nick is a price taker, this last condition COSTS AND REVENUE (Dollars per shirt) 0 1 3 4 5 QUANTITY (Shirts) Nick's profit is maximized when he produces maximize his profit) is which is quantity corresponds to the intersection of the can also be written as 2
Transcribed Image Text:Calculate Nick's marginal revenue and marginal cost for the first seven shirts he produces, 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. 40 35 Marginal Revenue 30 0- 25 Marginal Cost 20 15 10 5 0 6 7 8 shirts. When he does this, the marginal cost of the last shirt he produces is $ which is than the price Nick receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would than the price Nick receives for each shirt he sells. Therefore, Nick's profit-maximizing curves. Because Nick is a price taker, this last condition COSTS AND REVENUE (Dollars per shirt) 0 1 3 4 5 QUANTITY (Shirts) Nick's profit is maximized when he produces maximize his profit) is which is quantity corresponds to the intersection of the can also be written as 2
3. Profit maximization using total cost and total revenue curves Suppose Nick runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Nick's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Nick produces. ? 200 175 150 Total Cost 125 100 75 50 TOTAL COST AND REVENUE (Dollars) 0 -25 0 ☐ 1 2 ☐ ■ 3 4 5 QUANTITY (Shirts) ☐ 6 7 8 。 Total Revenue Profit
Transcribed Image Text:3. Profit maximization using total cost and total revenue curves Suppose Nick runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Nick's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Nick produces. ? 200 175 150 Total Cost 125 100 75 50 TOTAL COST AND REVENUE (Dollars) 0 -25 0 ☐ 1 2 ☐ ■ 3 4 5 QUANTITY (Shirts) ☐ 6 7 8 。 Total Revenue Profit
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Revenue and Cost
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
SEE MORE TEXTBOOKS