Suppose Madison operates a handicraft pop-up retall shop that sells phone cases. Assunt with a market price equal to $20 per phone case. The following graph shows Madison'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 Madison produces A TOTAL COST AND REVENUE (Dan) 200 175 150 900 REVENUE (Detais per phone case 2 h SARRE D a QUANTITY (Phone cases) Total Cost 0 Calculate Madison'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 Prof Assume a perfectly competitive market structure for phone cases Marge Revue -0-

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3. Profit maximization using total cost and total revenue curves
Suppose Madison operates a handicraft pop-up retall 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 Madison'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 Madison produces
TOTAL COST AND REVENUE (Dellan)
REB582.
179
150
TSAND REVENUE (Dotars per phone case)
6
D
SARRE
0
D
Q
QUANTITY (Phone cases)
•
Total Cost
Total Revenue
Calculate Madison'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 symbo) to plot marginal cost at each quantity
(?)
4
Prof
Marge Reven
-0-
Marginal Cost
Transcribed Image Text:3. Profit maximization using total cost and total revenue curves Suppose Madison operates a handicraft pop-up retall 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 Madison'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 Madison produces TOTAL COST AND REVENUE (Dellan) REB582. 179 150 TSAND REVENUE (Dotars per phone case) 6 D SARRE 0 D Q QUANTITY (Phone cases) • Total Cost Total Revenue Calculate Madison'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 symbo) to plot marginal cost at each quantity (?) 4 Prof Marge Reven -0- Marginal Cost
Calculate Madison'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.
?
COSTS AND REVENUE (Dolars per phone case)
40
35
30
20
15
10
D
QUANTITY (Phone cases)
Marginal Revenue
-0-
Marginal Cost
Madison's profit is maximized when they produce a total of
an amount
phone cases. At this quantity, the marginal cost of the final phone case they
oduce is 5
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 S
than the price received for each
phone case they sell. Therefore, Madison's profit-maximizing quantity occurs at the point of intersection between the
curves. Because Madison is a price taker, the previous condition is equivalent to
an amount
Transcribed Image Text:Calculate Madison'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. ? COSTS AND REVENUE (Dolars per phone case) 40 35 30 20 15 10 D QUANTITY (Phone cases) Marginal Revenue -0- Marginal Cost Madison's profit is maximized when they produce a total of an amount phone cases. At this quantity, the marginal cost of the final phone case they oduce is 5 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 S than the price received for each phone case they sell. Therefore, Madison's profit-maximizing quantity occurs at the point of intersection between the curves. Because Madison is a price taker, the previous condition is equivalent to an amount
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