Suppose Poornima runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $25 per teddy bear. The following graph shows Poornima's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Poornima produces.   Calculate Poornima's marginal revenue and marginal cost for the first seven teddy bears 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.   Poornima's profit is maximized when she produces   teddy bears. When she does this, the marginal cost of the last teddy bear she produces is   , which is    than the price Poornima receives for each teddy bear she sells. The marginal cost of producing an additional teddy bear (that is, one more teddy bear than would maximize her profit) is   , which is    than the price Poornima receives for each teddy bear she sells. Therefore, Poornima's profit-maximizing quantity corresponds to the intersection of the    curves. Because Poornima is a price taker, this last condition can also be written as    .

ENGR.ECONOMIC ANALYSIS
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Suppose Poornima runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $25 per teddy bear.
The following graph shows Poornima's total cost curve.
Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Poornima produces.
 
Calculate Poornima's marginal revenue and marginal cost for the first seven teddy bears 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.
 
Poornima's profit is maximized when she produces
 
teddy bears. When she does this, the marginal cost of the last teddy bear she produces is
 
, which is    than the price Poornima receives for each teddy bear she sells. The marginal cost of producing an additional teddy bear (that is, one more teddy bear than would maximize her profit) is
 
, which is    than the price Poornima receives for each teddy bear she sells. Therefore, Poornima's profit-maximizing quantity corresponds to the intersection of the    curves. Because Poornima is a price taker, this last condition can also be written as    .
 
 
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Marginal Revenue
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25
Marginal Cost
O Give Feedback
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15
10
bonge
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1.
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QUANTITY (Teddy bears)
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12/8/2021
COSTS AND REVENUE (Dollars per teddy bear)
x ...
Transcribed Image Text:b My Questions | bartleby * MindTap - Cengage Learning A ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090816& E Apps M Gmail YouTube A Maps A clickserve.dartsearc. E Reading list « * CENGAGE MINDTAP Q Search this course Love v A My Home Homework (Ch 14) Courses O Catalog and Study Tools A-Z EE Rental Options 40 P College Success Tips 35 Marginal Revenue Career Success Tips 30 ? Help 25 Marginal Cost O Give Feedback 20 15 10 bonge 5 1. 2 3 4 5 7 QUANTITY (Teddy bears) 8:31 PM P Type here to search L 100% 44°F 12/8/2021 COSTS AND REVENUE (Dollars per teddy bear) x ...
b My Questions | bartleby
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A ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090816&
E Apps M Gmail
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Love v
A My Home
Homework (Ch 14)
seven (inclusive) that Poornima produces.
Courses
O Catalog and Study Tools
A-Z
EE Rental Options
200
P College Success Tips
175
Total Revenue
Career Success Tips
150
Total Cost
? Help
125
Profit
O Give Feedback
100
75
50
bongo
25
-25
1
2
3
7
8
QUANTITY (Teddy bears)
8:30 PM
O Type here to search
L
100%
44°F
12/8/2021
TOTAL COST AND REVENUE (Dollars)
x ...
Transcribed Image Text:b My Questions | bartleby * MindTap - Cengage Learning A ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090816& E Apps M Gmail YouTube A Maps A clickserve.dartsearc. E Reading list « * CENGAGEMINDTAP Q Search this course Love v A My Home Homework (Ch 14) seven (inclusive) that Poornima produces. Courses O Catalog and Study Tools A-Z EE Rental Options 200 P College Success Tips 175 Total Revenue Career Success Tips 150 Total Cost ? Help 125 Profit O Give Feedback 100 75 50 bongo 25 -25 1 2 3 7 8 QUANTITY (Teddy bears) 8:30 PM O Type here to search L 100% 44°F 12/8/2021 TOTAL COST AND REVENUE (Dollars) x ...
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