(Figure: Interpreting MC and Price Curves) The profit-maximizing output is_units. 75 57 70- MC 65 - 60 - 54 PRICE 12 50 21 48 45- 40 40 10 20 30 40 60 Output O A. 12 В. 31 O C. 57 D.54 A Moving to another question will savo thir rornonc 50 31 Price and Cost

4. Profit maximization using total cost and total revenue curves Suppose Carlos runs a small business that manufactures shirts. Assume that the market for shirts is a price-taker market, and the market price is $10 per shirt. The following graph shows Carlos'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 Carlos produces, including zero shirts. O REVENUE (Dollars) 125 COSTS AND REVENUE (Dollars per shirt) 100 75 50 25 -25 -50 30 20 15 0 Total Revenue 0 et = Profit n A A O 0 1 0 0 2 Calculate Carlos'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. (?) 1 3 4 5 QUANTITY (Shirts) 2 3 0 5 QUANTITY (Shirts) 6 4 Total Cost 0 6 O 7 8 7 8 -0- (?) Marginal Revenue Marginal Cost Carlos's profit is…

7. Josh Brinkley is pricing popcorn at the local movie theatre. If the marginal cost of a 16 oz. bag of popcorn is $0.50 and the price elasticity of demand is -1.25, what price should Josh set? a. $0.50 b. $0.75 c. $1.25 d. $2.50

1. Fill in this chart and explain why the firm earnsa profit no matter how many units they produce or the price they choose. 2.  Using this data, how many units should this firm produce and what price should they chargeassuming they want to profit maximize.