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- Suppose Megan runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $25 per teddy bear. The following graph shows Megan's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven teddy bears that Megan produces, including zero teddy bears. 200 T 175 150 125 100 75 50 0 -25 35 30 20 15 10 5 0 0 D 0 1 2 1 C 2 D ☐ 3 4 5 QUANTITY (Teddy bears) Calculate Megan's marginal revenue and marginal cost for the first seven teddy bears 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. (?) 0 3 4 5 QUANTITY (Teddy bears) 6 Total Cost 0 6 7 8 7 O 8 Total Revenue A Profit O (?) Marginal Revenue Marginal Cost Megan's profit is maximized when she produces teddy bears. When she does this, the marginal cost…Discuss why a firm in perfect competition may choose to be open on Mondays, typically the slowest day of the week, when their revenues do not seem to be sufficient to warrant doing so.Suppose Kevin runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $20 per teddy bear. The following graph shows Kevin's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Kevin produces. Calculate Kevin's marginal revenue and marginal cost for the first seven teddy bears 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. Kevin's profit is maximized when he produces ___ teddy bears. When he does this, the marginal cost of the last teddy bear he produces is ___ , which is (greater/less) than the price Kevin receives for each teddy bear he sells. The marginal cost of producing an additional teddy bear (that is,…
- Suppose Rina runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $20 per frying pan. The following graph shows Rina's total cost curve. On the graph below, use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven frying pans that Rina produces, including zero frying pans. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 50 25 0 -25 □ 0 1 U 2 ■ U 3 4 5 QUANTITY (Frying pans) n 6 Total Cost 7 8 Total Revenue Profit ?looking to see if my answer is correct for this homework problem and if not why. the AVC is throwing me offThe firm depicted by the graph below is producing q0 level of output. Given its costs, is the firm producing at the profit-maximizing/loss minimizing level of output? Briefly explain why or why not.
- Consider the competitive market for rhodium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. COSTS (Dollars per pound) 80 2233 22 72 64 56 80 48 72 64 56 48 40 00 32 24 16 0 0 MCD ATC Demand 0 AVC The following graph plots the market demand curve for rhodium. -0. ☐ 3 6 9 12 15 18 21 QUANTITY (Thousands of pounds) D Use the orange points (square symbol) to plot the initial short-run industry supply curve when there are 10 firms in the market. (Hint: You can disregard the portion of the supply curve that corresponds to prices where there is no output since this is the industry supply curve.) Next, use the purple points (diamond symbol) to plot the short-run industry supply curve when there are 20 firms. Finally, use the green points (triangle symbol) to plot the short-run industry supply curve when there are 30…V4Suppose Larry 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 Larry'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 Larry produces. Calculate Larry's marginal revenue and marginal cost for the first seven shirts 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. Larry's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is , which is than the price Larry receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is , which is…
- Briefly explain how the total revenue for a profit-seeking firm is determined.3. Profit maximization using total cost and total revenue curves Suppose Simone runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $20 per teddy bear. The following graph shows Simone's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven teddy bears that Simone produces, including zero teddy bears. 200 175 Total Revenue 150 125 Total Cost Profit 100 75 50 25 -25 1 3 4 7 8 QUANTITY (Teddy bears) TOTAL COST AND REVENUE (Dollars)3. Profit maximization using total cost and total revenue curves Suppose Cho 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 Cho's total cost curve. Use 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 Cho produces. 200 175 Total Revenue 150 Total Cost 125 Profit 100 75 50 25 -25 1 2 3 4 7 8 QUANTITY (Frying pans) Calculate Cho's marginal revenue and marginal cost for the first seven frying pans 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. TOTAL COST AND REVENUE (Dollars)
