Calculate Raphael's marginal revenue and marginal cost for the first seven shirts he 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. COSTS AND REVENUE (Dollars per shirt) 40 35 30 25 20 15 S 10 0 0 1 2 3 5 QUANTITY (Shirts) 4 Raphael's profit is maximized when he produces is would maximize his profit) is $ 6 7 8 Marginal Revenue -O- Marginal Cost (? shirts. When he does this, the marginal cost of the last shirt he produces is $ , which than the price Raphael receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than than the price Raphael receives for each shirt he sells. Therefore, Raphael's profit- , which is maximizing quantity corresponds to the intersection of the curves. Because Raphael is a price taker, this last condition can also be written as

Calculate Raphael's marginal revenue and marginal cost for the first seven shirts he 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. COSTS AND REVENUE (Dollars per shirt) 40 35 30 25 20 15 S 10 0 0 1 2 3 5 QUANTITY (Shirts) 4 Raphael's profit is maximized when he produces is would maximize his profit) is $ 6 7 8 Marginal Revenue -O- Marginal Cost (? shirts. When he does this, the marginal cost of the last shirt he produces is $ , which than the price Raphael receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than than the price Raphael receives for each shirt he sells. Therefore, Raphael's profit- , which is maximizing quantity corresponds to the intersection of the curves. Because Raphael is a price taker, this last condition can also be written as

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 4PA

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