Calculate Keny'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 COSTS AND REVENUE (Dollars per trying pan) 15 QUANTITY (Frying pans) Keny's profit is maximized when he produces which is Marginal Revenue Marginal Cost is s frying pans. When he does this, the marginal cost of the last frying pan he produces than the price Kenji receives for each frying pan he sells. The marginal cost of producing an additional frying pan (that is, one more frying pan than would maximize his profit) is s which is than the price Kenji receives for each frying pan he curves. sells. Therefore, Kenji's profit-maximizing quantity corresponds to the intersection of the Because Kenji is a price taker, this last condition can also be written as

Calculate Keny'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 COSTS AND REVENUE (Dollars per trying pan) 15 QUANTITY (Frying pans) Keny's profit is maximized when he produces which is Marginal Revenue Marginal Cost is s frying pans. When he does this, the marginal cost of the last frying pan he produces than the price Kenji receives for each frying pan he sells. The marginal cost of producing an additional frying pan (that is, one more frying pan than would maximize his profit) is s which is than the price Kenji receives for each frying pan he curves. sells. Therefore, Kenji's profit-maximizing quantity corresponds to the intersection of the Because Kenji is a price taker, this last condition can also be written as

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

Calculate Kenji'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.
COSTS AND REVENUE (Dollars per frying pan)
8
8
25
20
15
2
1
QUANTITY (Frying pans)
7
-O
Marginal Revenue
--0-
Marginal Cost
Kenji's profit is maximized when he produces
is s
which is
frying pans. When he does this, the marginal cost of the last frying pan he produces
than the price Kenji receives for each frying pan he sells. The marginal cost of producing an additional frying pan
(that is, one more frying pan than would maximize his profit) is s
, which is
than the price Kenji receives for each frying pan he
curves.
sells. Therefore, Kenji's profit-maximizing quantity corresponds to the intersection of the
Because Kenji is a price taker, this last condition can also be written as

4. Total cost, average cost, and marginal cost in the short run
Suppose Kenji runs a small business that manufactures frying pans. Assume that the market for frying pans is a price-taker market, and the market
price is $20 per frying pan.
The following graph shows Kenji'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 frying pans that Kenji
produces, including zero frying pans.
TOTAL COST AND REVENUE (Dollars)
175
125
100
75
50
25
o
$$
D
0
D
1
2
4
5
QUANTITY (Frying pans)
Total Cost
7
Total Revenue
Profit

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