3. Profit maximization using total cost and total revenue curves Suppose Jayden operates a handicraft pop-up retail shop that sells phone cases. Assume a perfectly competitive market structure for phone cases with a market price equal to $20 per phone case. The following graph shows Jayden's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for phone cases for quantities zero through seven (including zero and seven) that Jayden produces. 200 O 175 Total Revenue 150 Total Cost 125 Profit 100 TOTAL COST AND REVENUE (Dollars) 75 50 O 25 O -25 2 3 5 6 7 QUANTITY (Phone cases)Calculate Jayden's marginal revenue and marginal cost for the first seven phone cases 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. 40 O 35 Marginal Revenue 30 -0- 25 Marginal Cost 20 COSTS AND REVENUE (Dollars per phone case) 15 10 0 2 3 5 6 7 8 0 4 QUANTITY (Phone cases)Jayden's prot is maximized when theyr produce a total of E phone cases. At this quantity, the marginal cost of the final phone case they produce is , an amount V than the price received for each phone case they sell. At this point, the marginal cost of producing one more phone case (the first phone case beyond the profit maximizing quantity) is , an amount V than the price received for each phone case they sell. Therefore. Jayden's profitmaximizing quantity occurs at the point of intersection between the v curves. Because Jayden is a price taker, the previous condition is equivalent to V . Jayden's prot is maximized when theyr produce a total of E phone cases. At this quantity, the marginal cost of the final phone case they produce is , an amount V than the price received for each phone case theyr sell. At this point, the marginal cost of producing one more phone case (the first phone d the profit maximizing quantity) is- , an amount V than the price received for each fitmaximizing quantity occurs at the point of intersection between the phone case they sell. Therefore, J. curves. Because Javden is a price taker, the previous condition is equivalent to V . greater Jayden's profit is maximized when they produce a total of phone cases. At this quantity, the ma t of the final phone case they less produce is $ , an amount than the price received for each phone case they sell. At the marginal cost of producing one more phone case (the first phone case beyond the profit maximizing quantity) is $ an amount than the price received for each phone case they sell. Therefore, Jayden's profit-maximizing quantity occurs at the point of intersection between the curves. Because Jayden is a price taker, the previous condition is equivalent tototal cost and total revenue total cost and marginal revenue ne 63585) total revenue and profit marginal cost and total revenue produce a total of E phone cases. At this quantity, the marginal cost of the nal phone case they:r l marginal cost and marginal revenue V than the price received for each phone case they' sell. At this pointr the marginal cost of producing one evond the profit maximizing quantity) is , an amount V than the price received for each 's profitmaximizing quantity occurs at the point of intersection between the total cost and prot v curves. Because Javden is a price taker, the previous condition is equivalent to V 4. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for rompers. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. 50 8 8 45 Profit or Loss An 35 30 ATC PRICE (Dollars per romper) 25 20 15 10 AVC MC 2 6 8 10 12 14 16 18 20 QUANTITY (Thousands of rompers per day)In the short run, given a market price equal to $15 per romper, the firm should produce a daily quantity of rompers. On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $15 and the quantity of production from your previous answer. Note: In the following question, enter a positive number regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run V of $ thousand per day for the firm.In the short run, given a market price equal to $15 per romper, the firm should produce a daily quantity of rompers. 2,000 On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or lo firm given the market price of 7,500 $15 and the quantity of production from your previous answer. 8,000 Note: In the following question, enter a positive number regardless of whether the firm earns a profit or inc 10,000 The rectangular area represents a short-run of $ thousand per day for the firm.On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $15 and the quantity of production from your s answer. loss Note: In the following question, enter a posit profit ber regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run of $ thousand per day for the firm