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3. Profit maximization using total cost and total revenue curves Suppose Amari operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure for cardigans with a market price equal to $20 per cardigan. The following graph shows Amari'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 through seven (including zero and seven) that Amari produces. ?

3. Profit maximization using total cost and total revenue curves Suppose Amari operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure for cardigans with a market price equal to $20 per cardigan. The following graph shows Amari'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 through seven (including zero and seven) that Amari produces. ?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please check/fix my answers and complete the problem. For the first graph, the orange line was already there.

 

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3. Profit maximization using total cost and total revenue curves Suppose Amari operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure for cardigans with a market price equal to $20 per cardigan. The following graph shows Amari'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 through seven (including zero and seven) that Amari produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 25 -25 ☐ O 0 ■ O A 1 2 0 O O 4 3 5 QUANTITY (Cardigans) O 6 Total Cost ☐ A 7 8 Total Revenue Profit (?
Transcribed Image Text:3. Profit maximization using total cost and total revenue curves Suppose Amari operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure for cardigans with a market price equal to $20 per cardigan. The following graph shows Amari'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 through seven (including zero and seven) that Amari produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 25 -25 ☐ O 0 ■ O A 1 2 0 O O 4 3 5 QUANTITY (Cardigans) O 6 Total Cost ☐ A 7 8 Total Revenue Profit (?
Q COSTS AND REVENUE (Dollars per cardigan) 40 35 Calculate Amari'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. (?) 30 25 20 15 10 5 0 0 M 1 2 3 5 QUANTITY (Cardigans) 4 Screen Shot 2023-02-21 at 8.16.49 PM ✓ 6 7 8 Marginal Revenue -O a Marginal Cost Q Search Amari'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 $ , an amount than the price received for each cardigan they sell. Therefore, Amari's profit-maximizing quantity occurs at the point of intersection between the curves. Because Amari is a price taker, the previous condition is equivalent to O OC O O Q + Amari's profit is maximized when they produce a total of cardigans. At this quantity, the marginal cost of the final cardigan they produce is $ , an amount than the price received for each cardigan they sell. At this point, the marginal cost of producing one more cardigan (the first cardig the profit maximizing quantity) is $ , an amount than the price received for each cardigan they sell. Therefore, Am greater-maximizing quantity occurs at the point of intersection between the curves. Because Amari is a price taker, the previous condition is equivalent to O Q Q Q 1 less Q 1 + total cost and total revenue total cost and profit total cost and marginal revenue total revenue and profit marginal cost and marginal revenue M Screen Shot 2023-02-21 at 8.17.07 PM ✓ A ^ Amari's profit is maximized when they produce a total of cardigans. At this quantity, $ , an amount than the price received for each cardigan they sell. At t cardigan (the first cardigan beyond the profit maximizing quantity) is $ , an amount they sell. Therefore, Amari's profit-maximizing quantity occurs at the point of intersection between the curves. Because Amari is a price taker, the previous condition is equivalent to Screen Shot 2023-02-21 at 8.17.15 PM ✓ ^ QUANTITY (Cardigans) 5 rdigans) 6 a 7 greater Screen Shot 2023-02-21 at 8.17.22 PM ✓ (₁) 8 less Q Search inal cost of the final cardigan they produce is the marginal cost of producing one more than the price received for each cardigan produce a total of cardigans. At this quantity, the marginal cost of the final cardigan they produce is han the price received for each cardigan they sell. At this point, the marginal cost of producing one more profit maximizing quantity) is S than the price received for each cardigan marginal cost and total revenue mizing quantity occurs at the point of intersection between the curves. Because Amari is a price taker, the previous condition is equivalent to , an amount Screen Shot 2023-02-21 at 8.17.28 PM ✓ @ Q Search Q Search Amari's profit is maximized when they produce a total of cardigans. At this quantity, the marginal cost of the final c $, an amount than the price received for each cardigan they sell. At this point, the marginal cost of p cardigan (the first cardigan beyond the profit maximizing quantity) is $, an amount than the price rec they sell. Therefore, Amari's profit-maximizing quantity occurs at the point of intersection between the curves. Because Amari is a price taker, the previous condition is equivalent to Q Search TC = TR Profit TR-TC Profit MR-MC MC = TR P = MC
Transcribed Image Text:Q COSTS AND REVENUE (Dollars per cardigan) 40 35 Calculate Amari'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. (?) 30 25 20 15 10 5 0 0 M 1 2 3 5 QUANTITY (Cardigans) 4 Screen Shot 2023-02-21 at 8.16.49 PM ✓ 6 7 8 Marginal Revenue -O a Marginal Cost Q Search Amari'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 $ , an amount than the price received for each cardigan they sell. Therefore, Amari's profit-maximizing quantity occurs at the point of intersection between the curves. Because Amari is a price taker, the previous condition is equivalent to O OC O O Q + Amari's profit is maximized when they produce a total of cardigans. At this quantity, the marginal cost of the final cardigan they produce is $ , an amount than the price received for each cardigan they sell. At this point, the marginal cost of producing one more cardigan (the first cardig the profit maximizing quantity) is $ , an amount than the price received for each cardigan they sell. Therefore, Am greater-maximizing quantity occurs at the point of intersection between the curves. Because Amari is a price taker, the previous condition is equivalent to O Q Q Q 1 less Q 1 + total cost and total revenue total cost and profit total cost and marginal revenue total revenue and profit marginal cost and marginal revenue M Screen Shot 2023-02-21 at 8.17.07 PM ✓ A ^ Amari's profit is maximized when they produce a total of cardigans. At this quantity, $ , an amount than the price received for each cardigan they sell. At t cardigan (the first cardigan beyond the profit maximizing quantity) is $ , an amount they sell. Therefore, Amari's profit-maximizing quantity occurs at the point of intersection between the curves. Because Amari is a price taker, the previous condition is equivalent to Screen Shot 2023-02-21 at 8.17.15 PM ✓ ^ QUANTITY (Cardigans) 5 rdigans) 6 a 7 greater Screen Shot 2023-02-21 at 8.17.22 PM ✓ (₁) 8 less Q Search inal cost of the final cardigan they produce is the marginal cost of producing one more than the price received for each cardigan produce a total of cardigans. At this quantity, the marginal cost of the final cardigan they produce is han the price received for each cardigan they sell. At this point, the marginal cost of producing one more profit maximizing quantity) is S than the price received for each cardigan marginal cost and total revenue mizing quantity occurs at the point of intersection between the curves. Because Amari is a price taker, the previous condition is equivalent to , an amount Screen Shot 2023-02-21 at 8.17.28 PM ✓ @ Q Search Q Search Amari's profit is maximized when they produce a total of cardigans. At this quantity, the marginal cost of the final c $, an amount than the price received for each cardigan they sell. At this point, the marginal cost of p cardigan (the first cardigan beyond the profit maximizing quantity) is $, an amount than the price rec they sell. Therefore, Amari's profit-maximizing quantity occurs at the point of intersection between the curves. Because Amari is a price taker, the previous condition is equivalent to Q Search TC = TR Profit TR-TC Profit MR-MC MC = TR P = MC
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