TOTAL COST AND REVENUE (Dollars)100Total CostםTotal Revenue7550-25A500125QUANTITY (Shirts)AAProfitCalculate Neha's marginal revenue and marginal cost for the first seven shirts 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.(?)COSTS AND REVENUE (Dollars per shirt)3025225201510оOO23A56QUANTITY (Shirts)Marginal Revenue+Marginal CostNeha's profit is maximized when she produces 10 shirts. When she does this, the marginal cost of the previous shirt she produces is $which isthan the price Neha receives for each shirt she sells. The marginal cost of producing an additional shirt (that is, one more shirtthan would maximize her profit) is Sthan the price Neha receives for each shirt she sells. Therefore, Neha's profit-maximizing quantity corresponds to the intersection of thewhich iscurves. Because Neha is a price taker, thislast condition can also be written as

The first graph shows the total cost, total revenue, and profit curves for a firm (likely a small…

Answered: TOTAL COST AND REVENUE (Dollars) 100…

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter8: Output, Price, And Profit: The Importance Of Marginal Analysis

Section8.A: Appendix The Relationships Among Total, Average, And Marginal Data

Problem 1TY

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