3. Profit maximization using total cost and total revenue curves

Suppose Dmitri 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 Dmitri's total cost curve.

A) 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 Dmitri produces, including zero shirts.

200 O 175 Total Revenue 150 Total Cost A 125 Profit 100 TOTAL COST AND REVENUE (Dollars) 75 50 0 25 -25 3 4 5 6 7 8 0 1 2 QUANTITY (Shirts)40 O 35 Marginal Revenue 30 -0- 25 Marginal Cost COSTS AND REVENUE (Dollars per shirt) 20 15 10 5 0 6 7 CO 0 1 2 3 5 QUANTITY (Shirts)