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Suppose Iyana operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure for cardigans with a market price equal to $20 per cardigan. The following graph shows Iyana's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for cardigans for quantities zero through seven (including zero and seven) that Iyana produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 -25 2 QUANTITY (Cardigans) Total Revenue Total Cost ם Profit Calculate Iyana's marginal revenue and marginal cost for the first seven cardigans 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 cardigan) 15 10 30 25 2 5 QUANTITY (Cardigans) Marginal Revenue ---- Marginal Cost Iyana's profit is maximized when they produce a total of an amount than the price received for each cardigan they sell. At this point, the marginal cost of producing one more cardigan (the first cardigan beyond the profit maximizing quantity) is $ , an amount than the price received for each cardigan they sell. Therefore, Iyana's profit-maximizing quantity occurs at the point of intersection between the curves. Because Iyana is a price taker, the previous condition is equivalent to cardigans. At this quantity, the marginal cost of the final cardigan they produce is

Suppose Iyana operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure for cardigans with a market price equal to $20 per cardigan. The following graph shows Iyana's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for cardigans for quantities zero through seven (including zero and seven) that Iyana produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 -25 2 QUANTITY (Cardigans) Total Revenue Total Cost ם Profit Calculate Iyana's marginal revenue and marginal cost for the first seven cardigans 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 cardigan) 15 10 30 25 2 5 QUANTITY (Cardigans) Marginal Revenue ---- Marginal Cost Iyana's profit is maximized when they produce a total of an amount than the price received for each cardigan they sell. At this point, the marginal cost of producing one more cardigan (the first cardigan beyond the profit maximizing quantity) is $ , an amount than the price received for each cardigan they sell. Therefore, Iyana's profit-maximizing quantity occurs at the point of intersection between the curves. Because Iyana is a price taker, the previous condition is equivalent to cardigans. At this quantity, the marginal cost of the final cardigan they produce is

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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COSTS AND REVENUE (Dollars per cardigan) 5 15 20 Suppose Iyana operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure for cardigans with a market price equal to $20 per cardigan. The following graph shows Iyana's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for cardigans for quantities zero through seven (including zero and seven) that Iyana produces. 200 175 150 Total Cost 125 100 TOTAL COST AND REVENUE (Dollars) 75 50 -25 2 6 7 8 QUANTITY (Cardigans) Profit Total Revenue ཟླ༔』 ཝཱ Calculate Iyana's marginal revenue and marginal cost for the first seven cardigans 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. 35 ° 2 5 6 7 8 QUANTITY (Cardigans) Marginal Revenue -0- Marginal Cost Iyana's profit is maximized when they produce a total of $ an amount cardigans. At this quantity, the marginal cost of the final cardigan they produce is than the price received for each cardigan they sell. At this point, the marginal cost of producing one more cardigan (the first cardigan beyond the profit maximizing quantity) is $ , an amount than the price received for each cardigan they sell. Therefore, Iyana's profit-maximizing quantity occurs at the point of intersection between the curves. Because Iyana is a price taker, the previous condition is equivalent to
Transcribed Image Text:COSTS AND REVENUE (Dollars per cardigan) 5 15 20 Suppose Iyana operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure for cardigans with a market price equal to $20 per cardigan. The following graph shows Iyana's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for cardigans for quantities zero through seven (including zero and seven) that Iyana produces. 200 175 150 Total Cost 125 100 TOTAL COST AND REVENUE (Dollars) 75 50 -25 2 6 7 8 QUANTITY (Cardigans) Profit Total Revenue ཟླ༔』 ཝཱ Calculate Iyana's marginal revenue and marginal cost for the first seven cardigans 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. 35 ° 2 5 6 7 8 QUANTITY (Cardigans) Marginal Revenue -0- Marginal Cost Iyana's profit is maximized when they produce a total of $ an amount cardigans. At this quantity, the marginal cost of the final cardigan they produce is than the price received for each cardigan they sell. At this point, the marginal cost of producing one more cardigan (the first cardigan beyond the profit maximizing quantity) is $ , an amount than the price received for each cardigan they sell. Therefore, Iyana's profit-maximizing quantity occurs at the point of intersection between the curves. Because Iyana is a price taker, the previous condition is equivalent to
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