Suppose Sam 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 Sam'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 Sam produces, including zero shirts.

Required:

Calculate Sam'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.

Transcribed Image Text:

TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 -25 до Oo ОД A O D 0 1 2 DO O 4 O O A 5 3 QUANTITY (Shirts) O 0 Total Cost 0 6 7 8 Total Revenue Profit TOTAL COST AND REVENUE (Dollars) 200 175 150 125 100 75 -25 до Oo ОД A O D 0 1 2 DO O 4 O O A 5 3 QUANTITY (Shirts) O 0 Total Cost 0 6 7 8 Total Revenue Profit

Answer rating: 100% (QA)

From the given total cost and price information the following table can be constructed Price is 20 a... View the full answer