Calculate Raphael'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. COSTS AND REVENUE (Dollars per shirt) 40 35 30 25 20 15 S 10 0 0 1 2 3 5 QUANTITY (Shirts) 4 Raphael's profit is maximized when he produces is would maximize his profit) is $ 6 7 8 Marginal Revenue -O- Marginal Cost (? shirts. When he does this, the marginal cost of the last shirt he produces is $ , which than the price Raphael receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than than the price Raphael receives for each shirt he sells. Therefore, Raphael's profit- , which is maximizing quantity corresponds to the intersection of the curves. Because Raphael is a price taker, this last condition can also be written as

Calculate Raphael'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. COSTS AND REVENUE (Dollars per shirt) 40 35 30 25 20 15 S 10 0 0 1 2 3 5 QUANTITY (Shirts) 4 Raphael's profit is maximized when he produces is would maximize his profit) is $ 6 7 8 Marginal Revenue -O- Marginal Cost (? shirts. When he does this, the marginal cost of the last shirt he produces is $ , which than the price Raphael receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than than the price Raphael receives for each shirt he sells. Therefore, Raphael's profit- , which is maximizing quantity corresponds to the intersection of the curves. Because Raphael 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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6
QUESTION 3 Consider the following graph: Price and cost (per necklace) 260.00 240.00 220.00- 200.00 180.00- 160.00- 140.00 120.00- 100.00 80.00- 60.00- 40.00 20.00- 0.00 - 0 2 4 -O MC What is the profit maximizing quantity? D ATC MR 6 8 10 12 14 16 18 20 22 24 26 Quantity (diamond necklaces)
Suppose a local retailer is running the following sale on jugs of detergent: $20 each or 3 for $56. The total cost of purchasing two jugs is. The marginal cost of the third jug is _____. $60; $56 0 $56; $16 $56; $60 $40; $16 O $16; $40 O
4. Profit maximization in the cost-curve diagram Suppose that the market for candles is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. Hint: After placing the rectangle on the graph, you can select an endpoint to see the coordinates of that point.
a. the increase in profit when output is reduced from 8 to 7 units of output. b. the profit that could be made if output increases from 7 to 8 units of output. c. the deadweight loss associated with the power of the price taking firm. d. the amount of profit when 8 units of output are produced.
113. Subject :- Economy
Calculate Kenji'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. ? 30 8 COSTS AND REVENUE (Dollars per shirt) 25 15 O 10 0 0 1 2 5 QUANTITY (Shirts) 3 4 6 Kenji's profit is maximized when he produces 7 8 would maximize his profit) is $ which is maximizing quantity corresponds to the intersection of the last condition can also be written as Marginal Revenue shirts. When he does this, the marginal cost of the last shirt he produces is $ which is than the price Kenji receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than than the price Kenji receives for each shirt he sells. Therefore, Kenji's profit- curves. Because Kenji is a price taker, this Marginal Cost
fill this graph out
Use the graph above to answer these questions: What is the profit-maximizing level of output? What is the economic profit? What is the per-unit amount of profit at the profit-maximizing level of output?
3
Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 100 90 70 60 ATC 40 30 20 AVC 10 + ++++ 10 15 20 3 30 35 o 5 QUANTITY (Thousands of jackets) 50 For each price in the following table, use the graph to determine the number ofr jackets this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price Quantity (Dollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? 10 20 32 COSTS (Dollars)
3. Profit maximization using total cost and total revenue curves Suppose Latasha 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 Latasha'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 Latasha produces.