**Educational Content: Marginal Revenue and Marginal Cost Analysis**---### Instruction: Calculate Nick'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 at each quantity.---### Graph Explanation:The graph titled "COSTS AND REVENUE (Dollars per shirt)" plots the quantity of shirts (ranging from 0 to 8) along the x-axis and the cost and revenue (ranging from 0 to 40 dollars per shirt) along the y-axis.**Legend:**- **Marginal Revenue:** Represented by blue circle points.- **Marginal Cost:** Represented by orange square points.Current graph state (basic grid structure) does not yet show data points.---### Analysis and Completion:Nick's profit is maximized when he produces **[number]** shirts. When he does this, the marginal cost of the last shirt he produces is **$[amount]**, which is [higher/lower] than the price Nick receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is **$[amount]**, which is [higher/lower] than the price Nick receives for each shirt he sells. Therefore, Nick's profit-maximizing quantity corresponds to the intersection of the **[specific]** and **[specific]** curves. Because Nick is a price taker, this last condition can also be written as **[condition]**.---*Please insert the correct values and complete the analysis based on the given data and the plotted graph points.* ### Profit Maximization Using Total Cost and Total Revenue Curves#### Scenario:Nick operates a small business that manufactures shirts. The shirt market is competitive, with a market price of $20 per shirt.#### Objective:The goal is to understand Nick's total cost and profit analytics through a given graph.#### Graph Explanation:The graph below illustrates Nick's total cost curve for manufacturing shirts.#### Instructions:- **Plot Total Revenue**: Use blue points (circle symbol) to represent total revenue.- **Plot Profit**: Use green points (triangle symbol) to indicate profit for shirt quantities ranging from zero to seven (inclusive).#### Graph Details:- **Axes**: - Horizontal Axis (X-axis): Quantity of shirts produced (ranging from 0 to 7). - Vertical Axis (Y-axis): Total cost and revenue in dollars (ranging from -25 to 200).- **Data Points**: - **Total Cost Curve**: Represented by orange squares. This line shows how total cost varies with the number of shirts produced.#### Total Cost Data Points:1. 0 shirts: $202. 1 shirt: $303. 2 shirts: $454. 3 shirts: $655. 4 shirts: $906. 5 shirts: $1207. 6 shirts: $1558. 7 shirts: $195This graph allows the visualization of how total cost increases with production quantity, aiding in the analysis of profit maximization strategies for Nick's shirt manufacturing business.

Introduction Here Nick runs a small business that manufactures shirt. Shirt market is a competitive…

Calculate Nick'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 at each quantity. 40 35 Marginal Revenue 30 Marginal Cost 0 1 3 4 5 6 7 8 QUANTITY (Shirts) Nick's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is which is than the price Nick 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 Nick receives for each shirt he sells. Therefore, Nick's profit-maximizing quantity corresponds to the intersection of the curves. Because Nick is a price taker, this last condition can also be written as COSTS AND REVENUE (Dollars per shirt) 5 0 2 。

Calculate Nick'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 at each quantity. 40 35 Marginal Revenue 30 Marginal Cost 0 1 3 4 5 6 7 8 QUANTITY (Shirts) Nick's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is which is than the price Nick 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 Nick receives for each shirt he sells. Therefore, Nick's profit-maximizing quantity corresponds to the intersection of the curves. Because Nick is a price taker, this last condition can also be written as COSTS AND REVENUE (Dollars per shirt) 5 0 2 。

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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