(Solved): 3. Profit maximization using total cost and total revenue curves Suppose Jacques runs a small busin ...

3. Profit maximization using total cost and total revenue curves Suppose Jacques runs a small business that manufactures frying pans. Assume that the market for frying pans is a competitive market, and the market price is \( \$ 20 \) per frying pan. The following graph shows Jacques's total cost curve. Use the blue points (circle symbol) to plot total revence and the green points (triangle symbol) to piot profit for frying pans quantities zero through. seven (inclusive) that lacques produces. Calculate lacques's marginal revenue and marginal cost for the first seven frving pans he produces, and piot them on the following oraph. Use the olue. points (circle symbo0 to plot marginal revenwe and the orange points (square symibob) to plot imargmol cost at each quancity. Calculate lacques's marginal revenue and marginal cost for the first seven frying pans he produces, and plot them on the following graph. Use the bilue points (circle symbol) to piot marginal revenue and the orange points (square symbol) to olot marninal cost at each quantity. Jacques's profit is maximized when he produces frying bans. When he does this, the maroinal cost of the last frying pan he produces is which is than the price lacques receives for each fryirio ban he 5 ellif, The marginal cost of producing an additional fryino pan (that is, one more frying pan than would maximize his profit) is , which is than the price Jacques receives for each frying pan he seils. Therefore, Jacgues's profit-maximezing quantity corresponds to the interiection of the Curves. Hecause Jacques is a pirice take, this last condition can also be written