TOTAL COST AND REVENUE (Dollars) 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 Madison produces. -25 200 175 100 75 50 QUANTITY (Cardigans) Total Cost ☐ Total Revenue Profit ? Calculate Madison's marginal revend marginal cost for the first seven cardigans they produce, and plot them on the following graph. Usp points (circle symbol) to plot margin venue and the orange points (square symbol) to plot marginal cost at each quantity. COSTS AND REVENUE (Dollars per cardigan) 15 40 0 1 2 4 5 8 QUANTITY (Cardigans) Marginal Revenue Marginal Cost Madison'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 they sell. Therefore, Madison's profit-maximizing quantity occurs at the point of intersection between the than the price received for each cardigan curves. Because Madison is a price taker, the previous condition is equivalent to
TOTAL COST AND REVENUE (Dollars) 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 Madison produces. -25 200 175 100 75 50 QUANTITY (Cardigans) Total Cost ☐ Total Revenue Profit ? Calculate Madison's marginal revend marginal cost for the first seven cardigans they produce, and plot them on the following graph. Usp points (circle symbol) to plot margin venue and the orange points (square symbol) to plot marginal cost at each quantity. COSTS AND REVENUE (Dollars per cardigan) 15 40 0 1 2 4 5 8 QUANTITY (Cardigans) Marginal Revenue Marginal Cost Madison'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 they sell. Therefore, Madison's profit-maximizing quantity occurs at the point of intersection between the than the price received for each cardigan curves. Because Madison is a price taker, the previous condition is equivalent to
Chapter23: Profit Maximization
Section: Chapter Questions
Problem 1E
Related questions
Question
Transcribed Image Text:TOTAL COST AND REVENUE (Dollars)
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 Madison produces.
-25
200
175
100
75
50
QUANTITY (Cardigans)
Total Cost
☐
Total Revenue
Profit
?
Calculate Madison's marginal revend marginal cost for the first seven cardigans they produce, and plot them on the following graph. Usp
points (circle symbol) to plot margin venue and the orange points (square symbol) to plot marginal cost at each quantity.
COSTS AND REVENUE (Dollars per cardigan)
15
40
0
1
2
4
5
8
QUANTITY (Cardigans)
Marginal Revenue
Marginal Cost
Madison'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
they sell. Therefore, Madison's profit-maximizing quantity occurs at the point of intersection between the
than the price received for each cardigan
curves. Because Madison is a price taker, the previous condition is equivalent to
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