4:11 ll 5GE A bartleby.com – Private 3. Profit maximization using total cost and total revenue curves Suppose Dmitri runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $25 per frying pan. 3. Profit maximization using total cost and total revenue curves Suppose Dmitri runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $25 per frying pan. The following graph shows Dmitri's total cost curve. Lse the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through seven (inclusive) that Drmitri produces. 200 175 Tatal Revenue 150 Tatal Cost 125 Profit 100 75 50 -25 QUANTITY (Frying pans) Calculate Dmitri's marginal revenue and marginal cost for the first seven frying pans he 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 Marginal Revenue 30 25 Marginal Cost 20 15 10 QUANTITY (Frying pans) nized when he produces frying pans. When he does this, the marginal cost of the last frying pan he produces is ▼ than the price Dmitri receives for each frying pan he sells. The marginal cost of producing an additional frying ng pan than would maximize his profit) is S i's profit-maximizing quantity corresponds to the intersection of the ce taker, this last condition can also be written as which is than the price Dmitri receives for each frying curves. COSTS AND REVENUE (Dolars per frying pan) TOTAL COST AND REVENUE (Dolars)
4:11 ll 5GE A bartleby.com – Private 3. Profit maximization using total cost and total revenue curves Suppose Dmitri runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $25 per frying pan. 3. Profit maximization using total cost and total revenue curves Suppose Dmitri runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $25 per frying pan. The following graph shows Dmitri's total cost curve. Lse the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through seven (inclusive) that Drmitri produces. 200 175 Tatal Revenue 150 Tatal Cost 125 Profit 100 75 50 -25 QUANTITY (Frying pans) Calculate Dmitri's marginal revenue and marginal cost for the first seven frying pans he 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 Marginal Revenue 30 25 Marginal Cost 20 15 10 QUANTITY (Frying pans) nized when he produces frying pans. When he does this, the marginal cost of the last frying pan he produces is ▼ than the price Dmitri receives for each frying pan he sells. The marginal cost of producing an additional frying ng pan than would maximize his profit) is S i's profit-maximizing quantity corresponds to the intersection of the ce taker, this last condition can also be written as which is than the price Dmitri receives for each frying curves. COSTS AND REVENUE (Dolars per frying pan) TOTAL COST AND REVENUE (Dolars)
Chapter1: Making Economics Decisions
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Transcribed Image Text:4:11
ll 5GE
A bartleby.com – Private
3. Profit maximization using total cost and total revenue curves
Suppose Dmitri runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market
price is $25 per frying pan.
3. Profit maximization using total cost and total revenue curves
Suppose Dmitri runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market
price is $25 per frying pan.
The following graph shows Dmitri's total cost curve.
Lse the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through
seven (inclusive) that Drmitri produces.
200
175
Tatal Revenue
150
Tatal Cost
125
Profit
100
75
50
-25
QUANTITY (Frying pans)
Calculate Dmitri's marginal revenue and marginal cost for the first seven frying pans he 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
Marginal Revenue
30
25
Marginal Cost
20
15
10
QUANTITY (Frying pans)
nized when he produces
frying pans. When he does this, the marginal cost of the last frying pan he produces is
▼ than the price Dmitri receives for each frying pan he sells. The marginal cost of producing an additional frying
ng pan than would maximize his profit) is S
i's profit-maximizing quantity corresponds to the intersection of the
ce taker, this last condition can also be written as
which is
than the price Dmitri receives for each frying
curves.
COSTS AND REVENUE (Dolars per frying pan)
TOTAL COST AND REVENUE (Dolars)
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