Calculate Ana's marginal revenue and marginal cost for the first seven teddy bears 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. llars per teddy bear) 25 1 2 QUANTITY (Teddy bears) O Marginal Revenue Marginal Cost Ana's profit is maximized when she produces S, which is teddy bears. When she does this, the marginal cost of the last teddy bear she produces is ✓than the price Ana receives for each teddy bear she sells. The marginal cost of producing an additional teddy bear (that is, one more teddy bear than would maximize her profit) is S, which is than the price Ana receives for each teddy bear she sells. Therefore, Ana's profit-maximizing quantity corresponds to the intersection of the ✓curves. Because

Calculate Ana's marginal revenue and marginal cost for the first seven teddy bears 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. llars per teddy bear) 25 1 2 QUANTITY (Teddy bears) O Marginal Revenue Marginal Cost Ana's profit is maximized when she produces S, which is teddy bears. When she does this, the marginal cost of the last teddy bear she produces is ✓than the price Ana receives for each teddy bear she sells. The marginal cost of producing an additional teddy bear (that is, one more teddy bear than would maximize her profit) is S, which is than the price Ana receives for each teddy bear she sells. Therefore, Ana's profit-maximizing quantity corresponds to the intersection of the ✓curves. Because

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 20RQ: What two lines on a cost curve diagram intersect at the zero-profit point?

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