Calculate Rina's marginal revenue and marginal cost for the first seven frying pans she 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. COSTS AND REVENUE (Dollars per frying pan) 40 35 30 25 20 15 10 0 1 I 2 3 QUANTITY (Frying pans) 4 5 6 7 8 Marginal Revenue O Marginal Cost Rina's profit is maximized when she produces frying pans. When she does this, the marginal cost of the last frying pan she produces is which is than the price Rina receives for each frying pan she sells. The marginal cost of producing an additional frying pan (that is, one more frying pan over the amount that would maximize her profit) is $ which is than the price Rina receives for each frying pan she sells. Therefore, Rina's profit-maximizing quantity corresponds to the intersection of the curves. Because Rina is a price taker, this last condition can also be written as

Calculate Rina's marginal revenue and marginal cost for the first seven frying pans she 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. COSTS AND REVENUE (Dollars per frying pan) 40 35 30 25 20 15 10 0 1 I 2 3 QUANTITY (Frying pans) 4 5 6 7 8 Marginal Revenue O Marginal Cost Rina's profit is maximized when she produces frying pans. When she does this, the marginal cost of the last frying pan she produces is which is than the price Rina receives for each frying pan she sells. The marginal cost of producing an additional frying pan (that is, one more frying pan over the amount that would maximize her profit) is $ which is than the price Rina receives for each frying pan she sells. Therefore, Rina's profit-maximizing quantity corresponds to the intersection of the curves. Because Rina is a price taker, this last condition can also be written as

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter23: Profit Maximization

Section: Chapter Questions

Problem 1E

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