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3. Profit maximization using total cost and total revenue curves Suppose Iyana operates a handicraft pop-up retail shop that sells rompers. Assume a perfectly competitive market structure for rompers with a market price equal to $25 per romper. The following graph shows Iyana's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for rompers for quantities zero through seven (including zero and seven) that Iyana produces. Calculate Iyana's marginal revenue and marginal cost for the first seven rompers they produce, 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. Therefore, Iyana's profit-maximizing quantity occurs at the point of intersection between the - curves. Because Iyana is a price taker, the previous condition is equivalent to marginal cost of the final romper they produce is oint, the marginal cost of producing one more romper than the price received for each romper they sell. curves. naximized when they produce a total of rompers. At this quantity, y produce is mount than the price received for each romper they sell. At th one more romper beyond the profit maximizing quantity) is, an amount per they sell. 's profit-maximizing quantity occurs at the point of intersection between the curves. a price taker, the previous condition is equivalent to Iyana's profit is maximized when they produce a total of , an amount than the price received fol (the first romper beyond maximizing quantity) is Therefore, Iyana's profit 19 quantity occurs at the poin Because Iyana is a price previous condition is equivale