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  3. suppose simone runs a small business that manufactures frying pans...

Question: suppose simone runs a small business that manufactures frying pans...

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Suppose Simone runs a small business that manufactures frying pans. Assume that the market for frying pans is a price-taker market, and the market price is $10 per frying pan The following graph shows Simones total cost curve. Use the blue points (circle symbol) to plot total revenue, and the green points (triangle symbol) to plot profit for the first seven frying pans that Simone produces, including zero frying pans Total Cost Total Revenue 75 ш50 Z 25 QUANTITY (Frying pans)Calculate Simones marginal revenue and marginal cost for the first seven frying pans 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. 30 25 Marginal Revenue 20 Marginal Cost ш15 QUANTITY (Frying pans) Simones profit is maximized when she produces frying pans. When she does this, the marginal cost of the previous frying pan she produces is than the price Simone receives for each frying pan she sells. The marginal cost of producing an additional frying pan which is_- 5 which is (that is, one more frying pan than would maximize her profit) is $ she sells. Therefore, Simones profit-maximizing quantity corresponds to the intersection of the Because Simone is a price taker, this last condition can also be written as than the price Simone receives for each frying pan CUrves

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