3. Profit maximization using total cost and total revenue curves Suppose Frances 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 Frances'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 frances produces; including zero shirts. Cakudate frances' marginal revenve and marpinal cost for the first seven shirts she produces and Dot them an the following graph. Use che blve points (cinde symbol) to plot marginal revenue and the orange points (square symbol) to plot marqinal cost. Frances's profit is maximized when she produces shirts. When she does this, the marginal cost of the previous shirt the produces is which is than the arice frances receives for each shirt she sels. The marginal cost of producing an additional shir (that is, one more shirt than would maximize her profa) is , which ia than the price Frances receives for each shirt she sells. Therefore, Frances's profit-maximiaing quantity corresponds to the intersection of the curves. Because Frances is a price takec, this last condition can also be writen as