Suppose Valerie runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a price-taker market, and the market price is $10 per teddy bear. The following graph shows Valerie's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven teddy bears that Valerie produces, including zero teddy bears. 125 Total Cost 100 Total Revenue 75 Profit 50 25 1 2 3 5 8 QUANTITY (Teddy bears) Calculate Valerie's marginal revenue and marginal cost for the first seven teddy bears she 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. TOTAL COST AND REVENUE (Dollars)

Suppose Valerie runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a price-taker market, and the market price is $10 per teddy bear. The following graph shows Valerie's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven teddy bears that Valerie produces, including zero teddy bears. 125 Total Cost 100 Total Revenue 75 Profit 50 25 1 2 3 5 8 QUANTITY (Teddy bears) Calculate Valerie's marginal revenue and marginal cost for the first seven teddy bears she 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. TOTAL COST AND REVENUE (Dollars)

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.6IP

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