Question

Suppose Caroline runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $25 per teddy bear. The following graph shows Caroline's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Caroline produces. Total Revenue Total Cost Profit TOTAL COST AND REVENUE (Dollars) 0 1 2 6 7 8 3 4 5 QUANTITY (Teddy bears)

Answer 1

Q	TC	TR	Profit	MC	MR
0	20	0	-20
1	40	25	-15	20	25
2	50	50	0	10	25
3	55	75	20	5	25
4	65	100	35	10	25
5	80	125	45	15	25
6	100	150	50	20	25
7	130	175	45	30	25

Total Revenue Total Cost Profit TOTAL COST AND REVENUE (Dollars) 0 1 2 3 4 5 QUANTITY (Frying pans) 6 7 8

Marginal Revenue Marginal Cost COSTS AND REVENUE (Dollars per frying pan) 0 1 2 6 7 8 3 4 5 QUANTITY (Frying pans)
Blanks-

1) 6

2) 20

3) less

4) 30

5) greater

6) MC=MR

7) P=MC