Question

help me correct the graph and finish the problem and explain it please!

3. Profit maximization using total cost and total revenue curves Suppose Manuel runs a small business that manufactures shirts. Assume that the market for shirts is a price-taker market, and the market price is $10 per shirt. The following graph shows Manuel's 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 shirts that Manuel produces, including zero shirts. Total Cost Total Revenue Profit TOTAL COST AND REVENUE (Dollars) 0+ 0 1 2 3 4 5 QUANTITY (Shirts) 6 7 8

Answer 1

Graphs

30 25 Marginal Revenue 20 Marginal Cost 15 10 QUANTITY (Shirts) COSTS AND REVENUE (Doll ars per shirt

1) 4 shirts

at eqm, MR = MC, & after that, MC must be rising

2) MC of previous shirt ( 3rd shirt) = $ 0

3) which is lower than P = 10

4) MC of additional shirt( 5th) is $ 20

5) which is greater than ,​​​​​​​P = 10

6) intersection of MR & MC curves

7) as P = MC