Calculate Tim's marginal revenue and marginal cost for the first seven frying pans he produces, and plot them on the following graph. Use the bluepoints (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost.3025Marginal Revenue20Marginal Cost146QUANTITY (Frying pans)Tim's profit is maximized when he producesfrying pans. When he does this, the marginal cost of the last frying pan he produces is $which is▼ than the price Tim receives for each frying pan he sells. The marginal cost of producing an additional frying pan (that is, onemore frying pan than would maximize his profit) is $, which isTim's profit-maximizing quantity corresponds to the intersection of thethan the price Tim receives for each frying pan he sells. Therefore,curves. Because Tim is a pricetaker, this last condition can also be written asCOSTS AND REVENUE (Dollars per frying pan) Suppose Tim runs a small business that manufactures frying pans. Assume that the market for frying pans is a price-taker market, and the marketprice is $20 per frying pan.The following graph shows Tim'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 frying pans that Timproduces, including zero frying pans.175150Total Revenue125Total Cost100Profit-25-503QUANTITY (Frying pans)148the firrt ceren foring nans he produces, and plot them on the following graph. Use the blueTOTAL COST AND REVENUE (Dollars)

Perfect competition is a market structure where there are many buyers and sellers selling…

Suppose Tim runs a small business that manufactures frying pans. Assume that the market for frying pans is a price-taker market, and the market price is $20 per frying pan. The following graph shows Tim'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 frying pans that Tim produces, including zero frying pans.

Suppose Tim runs a small business that manufactures frying pans. Assume that the market for frying pans is a price-taker market, and the market price is $20 per frying pan. The following graph shows Tim'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 frying pans that Tim produces, including zero frying pans.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter23: Profit Maximization

Section: Chapter Questions

Problem 1E

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