opose Amari operates a handicraft pop-up retail shop that sells phone cases. Assume a perfectly competitive market structure for phone cases with market price equal to $20 per phone case. e following graph shows Amari's total cost curve. the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for phone cases for quantities zero ough seven (including zero and seven) that Amari produces. 200 175 150 125 100 75 50 25 0 0 -25 25 20 0 10 □ 1 2 1 D 2 5 3 QUANTITY (Phone cases) 6 3 4 5 QUANTITY (Phone cases) Total Cost culate Amari's marginal revenue and marginal cost for the first seven phone cases they produce, and plot them on the following graph. Use the e points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. (?) 6 7 7 8 ani's profit is maximized when they produce a total of O 8 Total Revenue Profit (?) Marginal Revenue Marginal Cost phone cases. At this quantity, the marginal cost of the final phone case they
opose Amari operates a handicraft pop-up retail shop that sells phone cases. Assume a perfectly competitive market structure for phone cases with market price equal to $20 per phone case. e following graph shows Amari's total cost curve. the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for phone cases for quantities zero ough seven (including zero and seven) that Amari produces. 200 175 150 125 100 75 50 25 0 0 -25 25 20 0 10 □ 1 2 1 D 2 5 3 QUANTITY (Phone cases) 6 3 4 5 QUANTITY (Phone cases) Total Cost culate Amari's marginal revenue and marginal cost for the first seven phone cases they produce, and plot them on the following graph. Use the e points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. (?) 6 7 7 8 ani's profit is maximized when they produce a total of O 8 Total Revenue Profit (?) Marginal Revenue Marginal Cost phone cases. At this quantity, the marginal cost of the final phone case they
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![3. Profit maximization using total cost and total revenue curves
Suppose Amari operates a handicraft pop-up retail shop that sells phone cases. Assume a perfectly competitive market structure for phone cases with
a market price equal to $20 per phone case.
The following graph shows Amari's total cost curve.
Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for phone cases for quantities zero
through seven (including zero and seven) that Amari produces.
200
175
150
125
100
75
50
25
0
-25
40
35
30
25
20
15
10
☐
0
0
■
1
2
1
O
2
■
0
3
4
5
QUANTITY (Phone cases)
Calculate Amari's marginal revenue and marginal cost for the first seven phone cases 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.
(?
0
6
3
4
5
QUANTITY (Phone cases)
Total Cost
☐
6
7
8
7
*]**
8
Total Revenue
Profit
O
(?)
Marginal Revenue
-O
Marginal Cost
Amari's profit is maximized when they produce a total of
produce is $, an amount
more phone case (the first phone case beyond the profit maximizing quantity) is S, an amount
phone case they sell. Therefore, Amari's profit-maximizing quantity occurs at the point of intersection between the
✓curves. Because Amari is a price taker, the previous condition is equivalent to
phone cases. At this quantity, the marginal cost of the final phone case they
than the price received for each phone case they sell. At this point, the marginal cost of producing one
than the price received for each](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F81e87c4e-7525-4ca2-8bee-4a6b43b4b098%2F5ebd84f4-08a8-486f-83a5-f54183eee57f%2Ffhfvsj_processed.png&w=3840&q=75)
Transcribed Image Text:3. Profit maximization using total cost and total revenue curves
Suppose Amari operates a handicraft pop-up retail shop that sells phone cases. Assume a perfectly competitive market structure for phone cases with
a market price equal to $20 per phone case.
The following graph shows Amari's total cost curve.
Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for phone cases for quantities zero
through seven (including zero and seven) that Amari produces.
200
175
150
125
100
75
50
25
0
-25
40
35
30
25
20
15
10
☐
0
0
■
1
2
1
O
2
■
0
3
4
5
QUANTITY (Phone cases)
Calculate Amari's marginal revenue and marginal cost for the first seven phone cases 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.
(?
0
6
3
4
5
QUANTITY (Phone cases)
Total Cost
☐
6
7
8
7
*]**
8
Total Revenue
Profit
O
(?)
Marginal Revenue
-O
Marginal Cost
Amari's profit is maximized when they produce a total of
produce is $, an amount
more phone case (the first phone case beyond the profit maximizing quantity) is S, an amount
phone case they sell. Therefore, Amari's profit-maximizing quantity occurs at the point of intersection between the
✓curves. Because Amari is a price taker, the previous condition is equivalent to
phone cases. At this quantity, the marginal cost of the final phone case they
than the price received for each phone case they sell. At this point, the marginal cost of producing one
than the price received for each
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