Thank you 4. Profit maximization with a cost table AaAa Suppose Yvonne runs a sm

Question

Thank you 4. Profit maximization with a cost table AaAa Suppose Yvonne 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 table represents Yvonne's cost structure per hour: Output Total Cost (Shirts) (Dollars) 0 15 25 30 40 75 105 150 7 If Yvonne produces and sells three shirts, her total revenue (TR) would be $75 and her profit would be ,and her marginal cost $25 $35 Yvonne's marginal revenue (MR) from the third shirt she sells is (MC) of producing a third shirt is $10_ The following graph presents Yvonne's total cost (based on the previous table). Use the blue points (circle symbols) to plot total revenue and the green points (triangle symbols) to plot profit for the first seven shirts that Yvonne produces. Line segments will automatically connect the points. Hint: You will have to plot eight points for each line. Remember to plot the points from left to right. COST, REVENUE, AND PROFIT (Dollarsl Total Revenue 200 175 150 125 100 75 50 Cost

Explanation / Answer

The above all answer is correct, except the last one( last paragraph) that is Marginal cost of producing additional shirt (6th unit) would be $30 , which is greater( not less than) than the price of yvonne.

and profit maximization quantity intersection is (marginal cost= Marginal revenue)

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