Suppose Larry runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt.The following graph shows Larry'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 Larry produces. Calculate Larry'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. Larry's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is , which is than the price Larry receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is , which is than the price Larry receives for each shirt he sells. Therefore, Larry's profit-maximizing quantity corresponds to the intersection of the curves. Because Larry is a price taker, this last condition can also be written as . b b Answered: 7. Price discrimir x* MindTap - Cengage Learning XC 2. Calculating Marginal Rever x17 QQQ 383.13v -1.74% Unna xa 10 Steps to Building a Winnir x +A ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090816&E Apps M GmailYouTube A Maps A clickserve.dartsearc.E Reading list«* CENGAGE MINDTAPQ Search this courseLove vA My HomeHomework (Ch 14)40Courses35O Catalog and Study ToolsMarginal Revenue30A-ZEE Rental Options25Marginal Cost- College Success Tips20Career Success Tips15? Help10O Give Feedback1.23478QUANTITY (Shirts)bongoLarry's profit is maximized when he producesshirts. When he does this, the marginal cost of the last shirt he produces isS, which isv than the price Larry receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt thanwould maximize his profit) is $, which isv than the price Larry receives for each shirt he sells. Therefore, Larry's profit-maximizing quantity corresponds to the intersection of thecurves. Because Larry is a price taker, thislast condition can also be written as1:00 AMP Type here to searchL30%39°FA O O O 4)12/7/2021COSTS AND REVENUE (Dollars per shirt)x ... b b Answered: 7. Price discrimir x* MindTap - Cengage Learning XC 2. Calculating Marginal Rever x17 QQQ 383.13v -1.74% Unna xa 10 Steps to Building a Winnir x +A ng.cengage.com/static/nb/ui/evo/index.html?deploymentld=59828118170010561930692029148&elSBN=9780357133606&snapshotld=2556323&id=1270090816&E Apps M GmailYouTube A Maps A clickserve.dartsearc.E Reading list«* CENGAGE MINDTAPQ Search this courseLove vA My HomeHomework (Ch 14)(inclusive) that Larry produces.CoursesO Catalog and Study Tools(?A-ZEE Rental Options200- College Success Tips175Career Success TipsTotal Revenue150? Help125Total CostO Give FeedbackProfit1007550bongo25-253QUANTITY (Shirts)12457812:59 AMP Type here to searchL30%O 4)12/7/202139°Fx ...近TO TAL COST AND REVENUE (Dollars)

In perfectly competitive markets, there are many sellers which produce homogenous good and sells…

Suppose Larry runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Larry'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 Larry produces. Calculate Larry'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. Larry's profit is maximized when he produces shirts. When he does this, the marginal cost of the last shirt he produces is , which is than the price Larry receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is , which is than the price Larry receives for each shirt he sells. Therefore, Larry's profit-maximizing quantity corresponds to the intersection of the curves. Because Larry is a price taker, this last condition can also be written as .

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 13CTQ: Think back to a purchase that you made recently. How would you describe your thinking before you...

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Question

Suppose Larry runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt.

The following graph shows Larry'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 Larry produces.

Calculate Larry'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.

Larry's profit is maximized when he produces

shirts. When he does this, the marginal cost of the last shirt he produces is

, which is than the price Larry receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize his profit) is

, which is than the price Larry receives for each shirt he sells. Therefore, Larry's profit-maximizing quantity corresponds to the intersection of the curves. Because Larry is a price taker, this last condition can also be written as .

b b Answered: 7. Price discrimir x
* MindTap - Cengage Learning X
C 2. Calculating Marginal Rever x
17 QQQ 383.13
v -1.74% Unna x
a 10 Steps to Building a Winnir x +
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)
40
Courses
35
O Catalog and Study Tools
Marginal Revenue
30
A-Z
EE Rental Options
25
Marginal Cost
- College Success Tips
20
Career Success Tips
15
? Help
10
O Give Feedback
1.
2
3
4
7
8
QUANTITY (Shirts)
bongo
Larry's profit is maximized when he produces
shirts. When he does this, the marginal cost of the last shirt he produces isS
, which is
v than the price Larry receives for each shirt he sells. The marginal cost of producing an additional shirt (that is, one more shirt than
would maximize his profit) is $
, which is
v than the price Larry receives for each shirt he sells. Therefore, Larry's profit-
maximizing quantity corresponds to the intersection of the
curves. Because Larry is a price taker, this
last condition can also be written as
1:00 AM
P Type here to search
L
30%
39°F
A O O O 4)
12/7/2021
COSTS AND REVENUE (Dollars per shirt)
x ...

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