4. Total cost, average cost, and marginal cost in the short run Suppose Kevin runs a small business that manufactures frying pans. Assume lhat the market for frying pans is a pricetaker market, and the market price is $20 per frying pan. The following graph shows Kevin's total cost curve. Use the blue points (circle symbeU to plot total revenue, and the green points (triangle symbol) to plot prot for the rst seven frying pans that Kevin pmduces, including zero frying pans. greater Kevin's prot is maximized when he produces \\:|fnring pans. when he does t E rginal cost of the last frying pan he produces is , which is V than the price Kevin receives for each frying pan [that is, one more frying pan than would maximize his prot) is , which is V than the price Kevin receives for each frying pan he sells. Therefore, Kevin's protmaximizing quantity corresponds to the intersection of the 7 curves. Because Kevin is a price taker, this last condition can also be written as Plrot = MR MC v . e marginal cost of producing an additional frying pan Kevin's prot is maximized when he produces Shim pans. when he does this, the marginal cost of the last frying pan he produces is , which is V than the price Kevin receives for each frying pan he sells. The marginal cost of producing an additional frying pan (that is, one more frying pan than would maximize his prot) is , which is V than the price Kevin receives for each frying pan he sells. Therefore, Kevin's prot-maximizing quantity corresponds to the intersection of the V curves. Because Kevin is a price taker, this last condition can also be written as Ret = MR MC v