Calculate Madison's marginal revenue and marginal cost for the first seven rompers they produce, and plot them on the following graph. Use the bluepoints (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity.COSTSAND REVENUE (Dollars per romper)40353025201550012435QUANTITY (Rompers)67Madison's profit is maximized when they produce a total of, an amount8Marginal RevenueMarginal Costrompers. At this quantity, the marginal cost of the final romper they produce isthan the price received for each romper they sell. At this point, the marginal cost of producing one more romper, an amountthan the price received for each romper they sell.(the first romper beyond the profit maximizing quantity) is STherefore, Madison's profit-maximizing quantity occurs at the point of intersection between theBecause Madison is a price taker, the previous condition is equivalent tocurves. 3. Profit maximization using total cost and total revenue curvesSuppose Madison operates a handicraft pop-up retail shop that sells rompers. Assume a perfectly competitive market structure for rompers with amarket price equal to $25 per romper.The following graph shows Madison's total cost curve.Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for rompers for quantities zero throughseven (including zero and seven) that Madison produces.TOTAL COST AND REVENUE (Dollars)200175 +150125100750-25001U2□035QUANTITY (Rompers)4O6Total Cost78Total RevenueProfit(2

Profit maximizing firm in a market optimizes its profits at the point where marginal revenue is…

Calculate Madison's marginal revenue and marginal cost for the first seven rompers 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. D REVENUE (Dollars per romper) 40 35 30 25 20 5 Marginal Revenue -0- Marginal Cost

Calculate Madison's marginal revenue and marginal cost for the first seven rompers 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. D REVENUE (Dollars per romper) 40 35 30 25 20 5 Marginal Revenue -0- Marginal Cost

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Calculate Iyana's marginal revenue and marginal cost for the first seven rompers 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 romper) 40 35 30 25 20 15 10 0 0 1 2 3 4 5 6 7 8 QUANTITY (Rompers) Marginal Revenue Marginal Cost ? Iyana's profit is maximized when they produce a total of is $ , an amount rompers. At this quantity, the marginal cost of the final romper they produce than the price received for each romper they sell. At this point, the marginal cost of producing one more romper (the first romper beyond the profit maximizing quantity) is $ , an amount than the price received for each romper they sell. Therefore, Iyana's profit-maximizing quantity occurs at the point of intersection between the Because Iyana is a price taker, the previous condition is equivalent to curves.
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