Suppose Edison 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 Edison'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 Edison produces. TOTAL COST AND REVENUE (Dotars) * 8 हृ 55 ४ 200 176 150 125 100 -25 2 n QUANTITY (Frying pans) B Total Cost Total Revenue A Profit Calculate Edison'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 at each quantity.
Suppose Edison 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 Edison'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 Edison produces. TOTAL COST AND REVENUE (Dotars) * 8 हृ 55 ४ 200 176 150 125 100 -25 2 n QUANTITY (Frying pans) B Total Cost Total Revenue A Profit Calculate Edison'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 at each quantity.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![Calculate Edison'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 at each quantity.
COSTS AND REVENUE (Dollars per frying pan)
O
35
30
25
20
15
10
1
2
QUANTITY (Frying pans)
Marginal Revenue
-4
Marginal Cost
Edison's profit is maximized when he produces
frying pans. When he does this, the marginal cost of the last frying pan he produces is s
which is
than the price Edison 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
than the price Edison receives for each frying pan he sells. Therefore,
curves. Because Edison is a price
which is
Edison's profit-maximizing quantity corresponds to the intersection of the
taker, this last condition can also be written as](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd2e5d5fa-1710-4491-be94-cde9e4b59811%2Fbc96cedd-76cb-4f85-9083-b6ea49757a3a%2Fckfgja_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Calculate Edison'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 at each quantity.
COSTS AND REVENUE (Dollars per frying pan)
O
35
30
25
20
15
10
1
2
QUANTITY (Frying pans)
Marginal Revenue
-4
Marginal Cost
Edison's profit is maximized when he produces
frying pans. When he does this, the marginal cost of the last frying pan he produces is s
which is
than the price Edison 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
than the price Edison receives for each frying pan he sells. Therefore,
curves. Because Edison is a price
which is
Edison's profit-maximizing quantity corresponds to the intersection of the
taker, this last condition can also be written as
![Is
Suppose Edison 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 Edison'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 Edison produces.
TOTAL COST AND REVENUE (Dolars)
200
175
150
125
100
50
0
-25
0
O
2
3
4
6
QUANTITY (Frying pans)
Total Cost
Total Revenue
A
Profit
?
Calculate Edison'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 at each quantity.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd2e5d5fa-1710-4491-be94-cde9e4b59811%2Fbc96cedd-76cb-4f85-9083-b6ea49757a3a%2F44ch0ls_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Is
Suppose Edison 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 Edison'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 Edison produces.
TOTAL COST AND REVENUE (Dolars)
200
175
150
125
100
50
0
-25
0
O
2
3
4
6
QUANTITY (Frying pans)
Total Cost
Total Revenue
A
Profit
?
Calculate Edison'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 at each quantity.
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