Please show working and calculations. Suppose Sam runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20per shirt.The following graph shows Sam's total cost curve.Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven shirts that Samproduces, including zero shirts.200175Total Revenue150Total Cost125Profit10050-2534678QUANTITY (Shirts)TOTAL COST AND REVENUE (Dollars) Calculate Sam's marginal revenue and marginal cost for the first seven shirts 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.(?4035Marginal Revenue3025Marginal Cost12345678QUANTITY (Shirts)Sam's profit is maximized when he producesshirts. When he does this, the marginal cost of the last shirt he produces is $, which isv than the price Sam receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt thanwould maximize his profit) is $, which isthan the price Sam receives for each shirt he sells. Therefore, Sam's profit-maximizingquantity corresponds to the intersection of thecurves. Because Sam is a price taker, this last conditioncan also be written asCOSTS AND REVENUE (Dollars per shirt)

Perfect competition refers to the situation where there are large number of prouder and consumers…

Suppose Sam runs a smalI business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Sam's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven shirts that Sam produces, including zero shirts. 200 175 Total Revenue 150 Total Cost 125 Profit 100 50 25 -25 3 4 5 6 7 8 QUANTITY (Shirts) TOTAL COST AND REVENUE (Dollars)

Suppose Sam runs a smalI business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Sam's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven shirts that Sam produces, including zero shirts. 200 175 Total Revenue 150 Total Cost 125 Profit 100 50 25 -25 3 4 5 6 7 8 QUANTITY (Shirts) TOTAL COST AND REVENUE (Dollars)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Financial Statements

Financial statements (or financial reports) are the formal records of the financial activities that are undertaken by a firm. They are convenient instruments used for analyzing a company’s financial position and performance. Financial ratios are created with the help of the numerical values that are derived from the financial statements. They give meaningful information about the financial performance of the company.

Question

100%

Please show working and calculations.

Suppose Sam runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20
per shirt.
The following graph shows Sam's total cost curve.
Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven shirts that Sam
produces, including zero shirts.
200
175
Total Revenue
150
Total Cost
125
Profit
100
50
-25
3
4
6
7
8
QUANTITY (Shirts)
TOTAL COST AND REVENUE (Dollars)

Calculate Sam's marginal revenue and marginal cost for the first seven shirts 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.
(?
40
35
Marginal Revenue
30
25
Marginal Cost
1
2
3
4
5
6
7
8
QUANTITY (Shirts)
Sam's profit is maximized when he produces
shirts. When he does this, the marginal cost of the last shirt he produces is $
, which is
v than the price Sam receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than
would maximize his profit) is $
, which is
than the price Sam receives for each shirt he sells. Therefore, Sam's profit-maximizing
quantity corresponds to the intersection of the
curves. Because Sam is a price taker, this last condition
can also be written as
COSTS AND REVENUE (Dollars per shirt)

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