, an amount Madison's profit is maximized when they produce a total of 5 phone cases. At this quantity, the marginal cost of the final phone case they produce is $ than the price received for each phone case they sell. At this point, the marginal cost of producing one more phone case (the first phone case beyond the profit maximizing quantity) is $ , an amount than the price received for each phone case they sell. Therefore, Madison's profit-maximizing quantity occurs at the point of intersection between the curves. Because Madison is a price taker, the previous condition is equivalent to

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Calculate Madison's marginal revenue and marginal cost for the first seven phone cases 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.
COSTS AND REVENUE (Dollars per phone case)
40
35
30
25
20
15
10
O
0
O
☐
1
O
2
O
□
O
O
☐
O
O
3
4
5
QUANTITY (Phone cases)
☐
6
7
8
Marginal Revenue
Marginal Cost
I
Madison's profit is maximized when they produce a total of 5 phone cases. At this quantity, the marginal cost of the final phone case they
produce is $
an amount
than the price received for each phone case they sell. At this point, the marginal cost of producing one
more phone case (the first phone case beyond the profit maximizing quantity) is $
, an amount
than the price received for each
phone case they sell. Therefore, Madison's profit-maximizing quantity occurs at the point of intersection between the
curves. Because Madison is a price taker, the previous condition is equivalent to
Transcribed Image Text:Calculate Madison's marginal revenue and marginal cost for the first seven phone cases 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. COSTS AND REVENUE (Dollars per phone case) 40 35 30 25 20 15 10 O 0 O ☐ 1 O 2 O □ O O ☐ O O 3 4 5 QUANTITY (Phone cases) ☐ 6 7 8 Marginal Revenue Marginal Cost I Madison's profit is maximized when they produce a total of 5 phone cases. At this quantity, the marginal cost of the final phone case they produce is $ an amount than the price received for each phone case they sell. At this point, the marginal cost of producing one more phone case (the first phone case beyond the profit maximizing quantity) is $ , an amount than the price received for each phone case they sell. Therefore, Madison's profit-maximizing quantity occurs at the point of intersection between the curves. Because Madison is a price taker, the previous condition is equivalent to
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