Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello, please help with my homework. At the last portion the first drop-down option is == greater or less Second drop-down option is == greater

Hello, please help with my homework.

At the last portion the first drop-down option is == greater or less

Second drop-down option is == greater or less

The third and fourth are added in the pictures. Thank you.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
11. Profit maximization using total cost and total revenue curves Suppose Neha runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $25 per shirt. The following graph shows Neha's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Neha produces. 200 175 Total Revenue 150 Total Cost A 125 Profit 100 TOTAL COST AND REVENUE (Dollars) 75 50 25 0 2 3 4 5 6 7 8 QUANTITY (Shirts)Calculate Neha's marginal revenue and marginal cost for the first seven shirts she produces, 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 shirt) 20 15 10 2 3 4 5 6 7 QUANTITY (Shirts) Neha's profit is maximized when she produces shirts. When she does this, the marginal cost of the last shirt she produces is $ , which is than the price Neha receives for each shirt she sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize her profit) is $ , which is than the price Neha receives for each shirt she sells. Therefore, Neha's profit- maximizing quantity corresponds to the intersection of the curves. Because Neha is a price taker, this last condition can also be written as40 O 35 Marginal Revenue 30 25 Marginal Cost COSTS AND REVENUE (Dollars per shirt) 20 15 10 total revenue and profit 0 0 2 3 5 6 7 total cost and profit QUANTITY (Shirts) marginal cost and total revenue total cost and marginal revenue Neha's profit is maximized when she produces shirt total cost and total revenue st of the last shirt she produces is $ , which is than the price Neha receives for each shirt g an additional shirt (that is, one more shirt than marginal cost and marginal revenue would maximize her profit) is $ , which is ch shirt she sells. Therefore, Neha's profit- maximizing quantity corresponds to the intersection of the V curves. Because Neha is a price taker, this last condition can also be written as40 O 35 Marginal Revenue 30 25 Marginal Cost COSTS AND REVENUE (Dollars per shirt) 20 15 10 5 2 3 QUANTIT Profit = TR - TC MC = TR P = MC Neha's profit is maximized when she s. When she does this, the marginal cost of the last shirt she produces is $ , which is than the price Neha Profit = MR - MC she sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize her profit) is $ than the price Neha receives for each shirt she sells. Therefore, Neha's profit- TC = TR maximizing quantity corresponds to curves. Because Neha is a price taker, this last condition can also be written as

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Marketing

Authors: Philip R Cateora

14th Edition

0073380989, 9780073380988

More Books

Students also viewed these Economics questions