3. Profit maximization using total cost and total revenue curves Suppose Madison 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 Madison'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 Madison produces. 200 O 175 Total Revenue 150 Total Cost 125 Profit 100 TOTAL COST AND REVENUE (Dollars) 75 50 25 -25 0 7 QUANTITY ( Phone cases ) Calculate Madison'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.Calculate Madison'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 25 Marginal Cost COSTS AND REVENUE (Dollars per phone case) 20 15 10 0 2 3 QUANTITY (Phone cases) Madison's profit is maximized when they produce a total of phone cases. At this quantity, the marginal cost of the final phone case they produce is $ , an amount 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 than the price received for each phone case they sell. Therefore, Madison's profit-maximizing quantity occurs at the point of intersection between the curves. Because Madison is a price taker, the previous condition is equivalent to