opose Amari operates a handicraft pop-up retail shop that sells phone cases. Assume a perfectly competitive market structure for phone cases with market price equal to $20 per phone case. e following graph shows Amari's total cost curve. the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for phone cases for quantities zero ough seven (including zero and seven) that Amari produces. 200 175 150 125 100 75 50 25 0 0 -25 25 20 0 10 □ 1 2 1 D 2 5 3 QUANTITY (Phone cases) 6 3 4 5 QUANTITY (Phone cases) Total Cost culate Amari's marginal revenue and marginal cost for the first seven phone cases they produce, and plot them on the following graph. Use the e points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. (?) 6 7 7 8 ani's profit is maximized when they produce a total of O 8 Total Revenue Profit (?) Marginal Revenue Marginal Cost phone cases. At this quantity, the marginal cost of the final phone case they

opose Amari operates a handicraft pop-up retail shop that sells phone cases. Assume a perfectly competitive market structure for phone cases with market price equal to $20 per phone case. e following graph shows Amari's total cost curve. the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for phone cases for quantities zero ough seven (including zero and seven) that Amari produces. 200 175 150 125 100 75 50 25 0 0 -25 25 20 0 10 □ 1 2 1 D 2 5 3 QUANTITY (Phone cases) 6 3 4 5 QUANTITY (Phone cases) Total Cost culate Amari's marginal revenue and marginal cost for the first seven phone cases they produce, and plot them on the following graph. Use the e points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. (?) 6 7 7 8 ani's profit is maximized when they produce a total of O 8 Total Revenue Profit (?) Marginal Revenue Marginal Cost phone cases. At this quantity, the marginal cost of the final phone case they

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 23RQ: What two lines on a cost curve diagram intersect at the shutdown point?

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Suppose Jake runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is $20 per frying pan. The following graph shows Jake's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for frying pans quantities zero through seven (inclusive) that Jake produces. 200 175 Total Revenue 150 Total Cost 125 Profit 100 75 50 25 -25 1 2 6 8 QUANTITY (Frying pans) Calculate Jake's marginal revenue and marginal cost for the first seven frying pans 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 25 Marginal Cost 20 15 1 2 3 4 5 6. QUANTITY (Frying pans) Jake's profit is maximized when he produces frying pans. When he does this, the marginal cost of the last frying pan he…
Calculate Jacques's marginal revenue and marginal cost for the first seven teddy bears 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. 40 35 Marginal Revenue 30 25 Marginal Cost 20 15 10 2 3 4 5 7 8 QUANTITY (Teddy bears) Jacques's profit is maximized when he produces , which is teddy bears. When he does this, the marginal cost of the last teddy bear he produces is than the price Jacques receives for each teddy bear he sells. The marginal cost of producing an additional teddy bear (that is, one more teddy bear than would maximize his profit) is s , which is than the price Jacques receives for each teddy bear he sells. Therefore, Jacques's profit-maximizing quantity corresponds to the intersection of the curves. Because Jacques is a price taker, this last condition can also be written as COSTS AND REVENUE (Dollars per teddy bear)
3. Profit maximization using total cost and total revenue curves Suppose Kenji runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a price-taker market, and the market price is $10 per teddy bear. The following graph shows Kenji'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 teddy bears that Kenji produces, including zero teddy bears. 125 Total Cost 100 Total Revenue 75 Profit 50 25 -25 -50 1 2 4 6 7 QUANTITY (Teddy bears) Calculate Kenji's marginal revenue and marginal cost for the first seven teddy bears 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. 30 TOTAL COST AND REVENUE (Dollars)
3. Profit maximization using total cost and total revenue curves Suppose Ana runs a small business that manufactures shirts. Assume that the market for shirts is a perfectly competitive market, and the market price is $20 per shirt. The following graph shows Ana'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 Ana produces, including zero shirts. TOTAL REVENUE, TOTAL COST, AND PROFIT (Dollars) Total Revenue A 125 100 Total Cost ☐ Profit 200 175 150 75 50 ༔་ཎྜ་ ྴ་སྐྱ ིི་ཐྭ་8་མ་° 1 2 3 4 5 6 7 8 QUANTITY OF OUTPUT (Shirts) (?) Calculate Ana's marginal revenue and marginal cost for the first seven shirts 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. Note: Be sure to plot marginal values between the appropriate whole unit values. For instance, plot…
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3. Profit maximization using total cost and total revenue curves Suppose Sam runs a small business that manufactures shirts. Assume that the market for shirts is a perfectly competitive market, and the market price is $20 per shirt. The following graph shows Sam'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 Sam produces, including zero shirts. TOTAL REVENUE, TOTAL COST, AND PROFIT (Dollars) 200 175 150 125 100 75 50 25 a -25 0 3 6 QUANTITY OF OUTPUT (Shirts) 2 4 5 Total Cost 7 8 O Total Revenue Profit (?)
1. Profit maximization using total cost and total revenue curves Suppose Juanita runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $20 per teddy bear. The following graph shows Juanita's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Juanita produces. TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 50 25 0 -25 n 0 ☐ 1 0 2 0 0 3 4 5 QUANTITY (Teddy bears) Total Cost ♫ 6 7 8 Total Revenue Profit ? Calculate Juanita's marginal revenue and marginal cost for the first seven teddy bears 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 at each quantity.
4. Profit maximization using total cost and total revenue curves Suppose Sharon 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 Sharon'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 Sharon produces, including zero shirts. 125 T 100 75 0 -50 30 20 15 0 1 0 2 1 3 4 5 QUANTITY (Shirts) 2 Calculate Sharon's marginal revenue and marginal cost for the first seven shirts 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. 3 5 QUANTITY (Shirts) 4 П 6 Total Cost ☐ 6 7 -O 8 Sharon's profit is maximized when she produces which is than would maximize her profit) is $, which is maximizing quantity corresponds to the Intersection of the last…
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Suppose Becky runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Becky's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for the first seven shirts that Becky produces, including zero shirts. 200 175 Total Revenue 150 Total Cost 125 Profit 100 75 -25 2. 3 4 6. 8. QUANTITY (Shirts) 50 25 TOTAL COST AND REVENUE (Dollars)
The accompanying graph shows the cost curves for Moe's mushroom gathering business, which is perfectly competitive. Price ($/bushel) 60 50 40 30 20 10 0 0 ΤΑ 10 20 30 40 50 60 70 80 Quantity (bushels/month) Select one: O A. 50 bushels. C If mushrooms sell for $10 per bushel, and Moe chooses the profit-maximizing quantity, he will gather: B. 30 bushels. O C. 20 bushels. O D. zero bushels.