Suppose Jayden 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 Jayden's total cost curve. Jayden's profit is maximized when they produce a total of ____phone cases. At this quantity, the marginal cost of the final phone case they produce is ___, an amount ( greater or less)than the price received for each phone case they sell. At this point, the marginal cost of producing one more phone case (the first phone case beyond the profit maximizing quantity) is ____, an amount(greater or less)than the price received for each phone case they sell. Calculate the marginal revenue and marginal cost for the first seven phone cases they produce, and plot them on the following graph. Use the blue points to plot marginal revenue and the orange points to plot marginal cost at each quantity. The provided graph is a plot showing the relationship between quantity and two key economic concepts: Marginal Revenue (MR) and Marginal Cost (MC) associated with the production of phone cases. The graph is titled, "Costs and Revenue (Dollars per phone case)" on the vertical axis, and "Quantity (Phone cases)" on the horizontal axis.**Axes and Labels:**- The horizontal axis represents the quantity of phone cases, ranging from 0 to 8.- The vertical axis represents the costs and revenue measured in dollars per phone case, spanning from 0 to 40.**Legend:**- A blue circle marks the "Marginal Revenue."- An orange square marks the "Marginal Cost."Currently, the graph does not include any plotted data points for either marginal revenue or marginal cost, suggesting the need for additional data to complete the analysis adequately.This graph could be used in an educational setting to illustrate the concepts of marginal revenue and marginal cost, allowing students to understand how businesses determine the optimal number of goods to produce based on these economic factors. **Graph Analysis: Total Cost and Revenue vs. Quantity of Phone Cases**This graph illustrates the relationship between the quantity of phone cases and their associated total cost and revenue, measured in dollars.- **Title:** The relationship of Total Cost and Revenue with Quantity. - **Axes:** - The x-axis represents the quantity of phone cases, ranging from 0 to 7. - The y-axis shows the total cost and revenue, measured in dollars, ranging from -25 to 200.- **Data Representation:** - A series of connected orange squares depict the total costs and revenues. It shows an upward trend as the quantity of phone cases increases, with notable inclines indicating significant revenue growth relative to sales volume. - **Legend:** - A blue circle represents "Total Revenue." - A green triangle denotes "Profit."- **Annotations:** - A label "Total Cost" is placed on the curve around the 6-quantity mark, indicating a focus point for total costs related to that quantity level.This graph effectively highlights the importance of understanding how both costs and revenues change with production quantity, which is vital for financial planning and analysis in a business context.

This can be defined as a concept that shows that when a purchaser purchases an extra unit of any…

Answered: Suppose Jayden operates a handicraft…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose Jayden 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 Jayden's total cost curve.

Jayden's profit is maximized when they produce a total of ____phone cases. At this quantity, the marginal cost of the final phone case they produce is ___, an amount ( greater or less)than the price received for each phone case they sell. At this point, the marginal cost of producing one more phone case (the first phone case beyond the profit maximizing quantity) is ____, an amount(greater or less)than the price received for each phone case they sell.

Calculate the marginal revenue and marginal cost for the first seven phone cases they produce, and plot them on the following graph. Use the blue points to plot marginal revenue and the orange points to plot marginal cost at each quantity.

The provided graph is a plot showing the relationship between quantity and two key economic concepts: Marginal Revenue (MR) and Marginal Cost (MC) associated with the production of phone cases. The graph is titled, "Costs and Revenue (Dollars per phone case)" on the vertical axis, and "Quantity (Phone cases)" on the horizontal axis.

**Axes and Labels:**
- The horizontal axis represents the quantity of phone cases, ranging from 0 to 8.
- The vertical axis represents the costs and revenue measured in dollars per phone case, spanning from 0 to 40.

**Legend:**
- A blue circle marks the "Marginal Revenue."
- An orange square marks the "Marginal Cost."

Currently, the graph does not include any plotted data points for either marginal revenue or marginal cost, suggesting the need for additional data to complete the analysis adequately.

This graph could be used in an educational setting to illustrate the concepts of marginal revenue and marginal cost, allowing students to understand how businesses determine the optimal number of goods to produce based on these economic factors.

**Graph Analysis: Total Cost and Revenue vs. Quantity of Phone Cases**

This graph illustrates the relationship between the quantity of phone cases and their associated total cost and revenue, measured in dollars.

- **Title:** The relationship of Total Cost and Revenue with Quantity.

- **Axes:**
- The x-axis represents the quantity of phone cases, ranging from 0 to 7.
- The y-axis shows the total cost and revenue, measured in dollars, ranging from -25 to 200.

- **Data Representation:**
- A series of connected orange squares depict the total costs and revenues. It shows an upward trend as the quantity of phone cases increases, with notable inclines indicating significant revenue growth relative to sales volume.

- **Legend:**
- A blue circle represents "Total Revenue."
- A green triangle denotes "Profit."

- **Annotations:**
- A label "Total Cost" is placed on the curve around the 6-quantity mark, indicating a focus point for total costs related to that quantity level.

This graph effectively highlights the importance of understanding how both costs and revenues change with production quantity, which is vital for financial planning and analysis in a business context.

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