Please help solve each part of equation and explain thank you 3. Profit maximization using total cost and total revenue curvesSuppose Rosa runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20per shirt.The following graph shows Rosa'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 Rosa produces.200175Total Revenue150Total Cost125Profit10075-253QUANTITY (Shirts)TOTAL COST AND REVENUE (Dollars) Calculate Rosa'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 at each quantity.4035Marginal Revenue3025Marginal Cost2015103QUANTY (Shirts)Rosa's profit is maximized when she produces| shirts. When she does this, the marginal cost of the last shirt she produces is Swhichisthan the price Rosa receives for each shirt she sells. The marginal cost of producing an additional shirt (that is, one more shirt thanwould maximize her profit) is Swhich isthan the price Rosa receives for each shirt she sells. Therefore, Rosa's profit-maximizing quantity corresponds to the intersection of thecurves. Because Rosa is a price taker, this lastcondition can also be written asCOSTS AND REVENUE(Dollars per shirt)

Total revenue is defined as the sum of all incoming sources of money earned by the company through the sale of goods or services. Total revenue is calculated by multiplying the average sales price per good or unit by the number of goods or units sold. The total cost is the sum of all costs incurred by a company in producing a specific level of output. It is typically expressed as the sum of all fixed costs (e.g., the costs of a building lease and heavy machinery) that do not vary with the amount of output produced and all variable costs (e.g., labor and raw material costs) that vary with the level of output.Given the price of the product is $20. The total revenue of the product is calculated by the product of price and quantity. It can be expressed as; Total revenue = Price × Quantity Profit is defined as the financial benefit realized when revenue from a business activity exceeds expenses, costs, and taxes. It can be expressed as; Profit = Total revenue - Total cost Marginal cost is the additional cost incurred by producing an additional unit of the output. So, MC = TCn- TCn-1 Marginal revenue is the additional revenue incurred by producing an additional unit of the output. Now, MR = ∆TR∆Q. Quantity (Q) TC TR Price × Quantity Profit TR-TC MC ∆TC∆Q MR ∆TR∆Q 0 10 0 -10 10 0 1 15 20 -5 5 20 2 20 40 20 5 20 3 30 60 30 10 20 4 45 80 35 15 20 5 70 100 30 25 20 6 100 120 20 30 20 7 135 140 5 35 20 All of the curves' coordinates have been determined. The quantity levels can be plotted against the TR, profit, MR, and MC curves. Rosa's profit is maximized when she produces 4 shirts. When she does this, the marginal cost of the last shirt she produces is $15, which is less than the price ($20) Rosa receives for each shirt she sells. The marginal cost of producing an additional shirt (that is, one more shirt that would maximize her profit) is $25, which is greater than the price Rosa receives for each shirt she sells. Therefore, Rosa's profit-maximizing quantity corresponds to the intersection of the curves of marginal cost and marginal revenue. Because Rosa is a price taker, this last condition can also be written as P = MC. curves' coordinates have been determined. The quantity levels can be plotted against the TR, profit, MR, and MC curves.

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3. Profit maximization using total cost and total revenue curves Suppose Rosa 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 Rosa'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 Rosa produces. 200 175 Total Revenue 150 Total Cost 125 Profit 100 50 25 2 QUANTITY (Shirts) TOTAL COST AND REVENUE (Dollars)

3. Profit maximization using total cost and total revenue curves Suppose Rosa 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 Rosa'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 Rosa produces. 200 175 Total Revenue 150 Total Cost 125 Profit 100 50 25 2 QUANTITY (Shirts) TOTAL COST AND REVENUE (Dollars)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Please help solve each part of equation and explain

thank you

3. Profit maximization using total cost and total revenue curves
Suppose Rosa 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 Rosa'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 Rosa produces.
200
175
Total Revenue
150
Total Cost
125
Profit
100
75
-25
3
QUANTITY (Shirts)
TOTAL COST AND REVENUE (Dollars)

Calculate Rosa'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 at each quantity.
40
35
Marginal Revenue
30
25
Marginal Cost
20
15
10
3
QUAN
TY (Shirts)
Rosa's profit is maximized when she produces
| shirts. When she does this, the marginal cost of the last shirt she produces is S
which
is
than the price Rosa receives for each shirt she sells. The marginal cost of producing an additional shirt (that is, one more shirt than
would maximize her profit) is S
which is
than the price Rosa receives for each shirt she sells. Therefore, Rosa's profit-
maximizing quantity corresponds to the intersection of the
curves. Because Rosa is a price taker, this last
condition can also be written as
COSTS AND REVENUE(Dollars per shirt)

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