M. 00 T CO 2) 40 30 20 은 15 COSTS AND REVENUE (Dollars per frying pan) Calculate Susan'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. 35 Marginal Revenue 25 Marginal Cost 4 0. 1. 8. QUANTITY (Frying pans! Susan's profit is maximized when she produces frying pans. When she does this, the marginal cost of the last frying pan she produces is which is than the price Susan receives for each frying pan she sells. The marginal cost of producing an additional frying pan 24 (that is, one more frying pan than would maximize her profit) is $ which is than the price Susan receives for each frying pan she sells. Therefore, Susan's profit-maximizing quantity corresponds to the intersection of the curves. Because Susan is a price taker, this last condition can also be written as MacBook Pro CHEF- 2$ ) 2 R B. N 00 CO T 2. 75 50 TOTAL COST AND REVENUE (Dollars) 3. Profit maximization using total cost and total revenue curves Suppose Susan runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $20 per frying pan. The following graph shows Susan's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through seven (inclusive) that Susan produces. 00. 175 Total Revenue 150 Total Cost 125 Profit 25 -25 4 9. QUANTITY (Frying pans) 8 3. 5. 7. MacBook Pro -CHEF- 23 2$ 4. M K H M X
M. 00 T CO 2) 40 30 20 은 15 COSTS AND REVENUE (Dollars per frying pan) Calculate Susan'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. 35 Marginal Revenue 25 Marginal Cost 4 0. 1. 8. QUANTITY (Frying pans! Susan's profit is maximized when she produces frying pans. When she does this, the marginal cost of the last frying pan she produces is which is than the price Susan receives for each frying pan she sells. The marginal cost of producing an additional frying pan 24 (that is, one more frying pan than would maximize her profit) is $ which is than the price Susan receives for each frying pan she sells. Therefore, Susan's profit-maximizing quantity corresponds to the intersection of the curves. Because Susan is a price taker, this last condition can also be written as MacBook Pro CHEF- 2$ ) 2 R B. N 00 CO T 2. 75 50 TOTAL COST AND REVENUE (Dollars) 3. Profit maximization using total cost and total revenue curves Suppose Susan runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $20 per frying pan. The following graph shows Susan's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through seven (inclusive) that Susan produces. 00. 175 Total Revenue 150 Total Cost 125 Profit 25 -25 4 9. QUANTITY (Frying pans) 8 3. 5. 7. MacBook Pro -CHEF- 23 2$ 4. M K H M X
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:M.
00
T
CO
2)
40
30
20
은
15
COSTS AND REVENUE (Dollars per frying pan)
Calculate Susan'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.
35
Marginal Revenue
25
Marginal Cost
4
0.
1.
8.
QUANTITY (Frying pans!
Susan's profit is maximized when she produces
frying pans. When she does this, the marginal cost of the last frying pan she produces is
which is
than the price Susan receives for each frying pan she sells. The marginal cost of producing an additional frying pan
24
(that is, one more frying pan than would maximize her profit) is $
which is
than the price Susan receives for each frying pan she
sells. Therefore, Susan's profit-maximizing quantity corresponds to the intersection of the
curves.
Because Susan is a price taker, this last condition can also be written as
MacBook Pro
CHEF-
2$
)
2
R
B.
N
Transcribed Image Text:00
CO
T
2.
75
50
TOTAL COST AND REVENUE (Dollars)
3. Profit maximization using total cost and total revenue curves
Suppose Susan runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market
price is $20 per frying pan.
The following graph shows Susan's total cost curve.
Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through
seven (inclusive) that Susan produces.
00.
175
Total Revenue
150
Total Cost
125
Profit
25
-25
4
9.
QUANTITY (Frying pans)
8
3.
5.
7.
MacBook Pro
-CHEF-
23
2$
4.
M
K
H
M
X
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