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Calculate Rian's marginal revenue and marginal cost for the first seven cardigans they produce, and plot 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 2 25 20 15 10 5 2 QUANTITY (Cardigans) Rian's profit is maximized when they produce a total of an amount. Marginal Revenue cardigan (the first cardigan beyond the profit maximizing quantity) is (3 they sell. Therefore, Rian's profit-maximizing -C cardigans. At this quantity, the marginal cost of the final cardigan they produce is than the price received for each cardigan they sell. At this point, the marginal cost of producing one more than the price received for each cardigan an amount Marginal Cost quantity occurs at the point of intersection between the curves. Because Rian is a price taker, the previous condition is equivalent to

Calculate Rian's marginal revenue and marginal cost for the first seven cardigans they produce, and plot 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 2 25 20 15 10 5 2 QUANTITY (Cardigans) Rian's profit is maximized when they produce a total of an amount. Marginal Revenue cardigan (the first cardigan beyond the profit maximizing quantity) is (3 they sell. Therefore, Rian's profit-maximizing -C cardigans. At this quantity, the marginal cost of the final cardigan they produce is than the price received for each cardigan they sell. At this point, the marginal cost of producing one more than the price received for each cardigan an amount Marginal Cost quantity occurs at the point of intersection between the curves. Because Rian is a price taker, the previous condition is equivalent to

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter8: Perfect Competition
Section: Chapter Questions
Problem 39P: The AAA Aquarium Co. sells aquariums for 20 each. Fixed costs of production are 20. The total...
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Calculate Rian'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 10 e 0 1 2 3 QUANTITY (Cardigans) 7 Marginal Revenue -O- Marginal Cost Rian's profit is maximized when they produce a total of an amount cardigans. At this quantity, the marginal cost of the final cardigan they produce is than the price received for each cardigan they sell. At this point, the marginal cost of producing one more. cardigan (the first cardigan beyond the profit maximizing quantity) is is S , an amount than the price received for each cardigan they sell. Therefore, Rian's profit-maximizing quantity occurs at the point of intersection between the curves. Because Rian is a price taker, the previous condition is equivalent to
Transcribed Image Text:Calculate Rian'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 10 e 0 1 2 3 QUANTITY (Cardigans) 7 Marginal Revenue -O- Marginal Cost Rian's profit is maximized when they produce a total of an amount cardigans. At this quantity, the marginal cost of the final cardigan they produce is than the price received for each cardigan they sell. At this point, the marginal cost of producing one more. cardigan (the first cardigan beyond the profit maximizing quantity) is is S , an amount than the price received for each cardigan they sell. Therefore, Rian's profit-maximizing quantity occurs at the point of intersection between the curves. Because Rian is a price taker, the previous condition is equivalent to
11. Profit maximization using total cost and total revenue curves Suppose Rian operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure market price equal to $20 per cardigan. The following graph shows Rian'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 seven (including zero and seven) that Rian produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 8 3 0 -25 O 0 U 2 0 □ 0 3 4 QUANTITY (Cardigans) O 6 Total Cost 0 7 8 Total Revenue A Profit ? Calculate Rian's marginal revenue and marginal cost for the first seven cardigans they produce, and plot them on the following gra points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity.
Transcribed Image Text:11. Profit maximization using total cost and total revenue curves Suppose Rian operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure market price equal to $20 per cardigan. The following graph shows Rian'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 seven (including zero and seven) that Rian produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 8 3 0 -25 O 0 U 2 0 □ 0 3 4 QUANTITY (Cardigans) O 6 Total Cost 0 7 8 Total Revenue A Profit ? Calculate Rian's marginal revenue and marginal cost for the first seven cardigans they produce, and plot them on the following gra points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity.
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