Suppose Rian operates a handicraft pop-up retail shop that sells rompers. Assume a perfectly competitive market structure for rompers with a marketprice equal to $25 per romper.The following graph shows Rian's total cost curve.Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for rompers for quantities zero throughseven (including zero and seven) that Rian produces.Ⓡ?TOTAL COST AND REVENUE (Dollars)2001751501251007550#QUANTITY (Rompers)Total CostTotal RevenueAProfit Calculate Rian's marginal revenue and marginal cost for the first seven rompers they produce, and plot them on the following graph. Use the bluepoints (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity.COSTS AND REVENUE (Dollars per romper)40353020152QUANTITY (Rompers)6-OMarginal Revenue-0-Marginal CostRian's profit is maximized when they produce a total ofrompers. At this quantity, the marginal cost of the final romper they produce isSan amountthan the price received for each romper they sell. At this point, the marginal cost of producing one more romper(the first romper beyond the profit maximizing quantity) isan amountthan the price received for each romper they sell.curves.Therefore, Rian's profit-maximizing quantity occurs at the point of intersection between theBecause Rian is a price taker, the previous condition is equivalent to

Total cost refers to the expenses incurred in the production of goods or services.Total revenue…

S an amount Rian's profit is maximized when they produce a total of rompers. At this quantity, the marginal cost of the final romper they produce is than the price received for each romper they sell. At this point, the marginal cost of producing one more romper (the first romper beyond the profit maximizing quantity) is than the price received for each romper they sell Therefore, Rian's profit-maximizing quantity occurs at the point of intersection between the Because Rian is a price taker, the previous condition is equivalent to an amount curves

S an amount Rian's profit is maximized when they produce a total of rompers. At this quantity, the marginal cost of the final romper they produce is than the price received for each romper they sell. At this point, the marginal cost of producing one more romper (the first romper beyond the profit maximizing quantity) is than the price received for each romper they sell Therefore, Rian's profit-maximizing quantity occurs at the point of intersection between the Because Rian is a price taker, the previous condition is equivalent to an amount curves

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter23: Profit Maximization

Section: Chapter Questions

Problem 1E

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