Suppose Ralph runs a small business that manufactures shirts. Assume that the ma

Question

Suppose Ralph runs a small business that manufactures shirts. Assume that the market for shirts is a perfectly competitive market and the market price is $25 per shirt. The following table represents Ralph's cost structure per hour: Total Cost (Dollars per hour) 15 25 30 40 Quantity (Shirts per hour) 75 105 150 and his profit would be and his marginal cost (MC) of If Ralph produces and sells three shirts, his total revenue (TR) would be $75 535 Raiph's marginal revenue (MR) from the third shirt he sels is $25 producing a third shirt is $10 The following graph presents Ralph's total cost (based on the previous table). Use the blue points (circle symbols) to plot total revenue and the green points (triangle symbols) to plot profit for the first seven shirts that Ralph produces. Line segments will automatically connect the points Hint: You will have to plot eight points for each line. Remember to plot the points from left to riht. COST, REVENUE AND PROFIT IDellars per hourl Total Revenue 125 50 25 OUTPUT IShirts per hourl Hele CleA Calculate Ralph's marginal revenue and marginal cost for the first seven shirts he produces, and plot them on the following graph. Use the blue points (ardle symbol) to pliot marginel revenue and the orange points (square symbol) Hint: Remember to plot from left to right and to plot between integers. For example, if Ralph's marginal cost of increasing production from one shirt to two shirts is x, then you would plot a point at (1.5, x). Line segments will automatically connect the points. MC AND MR IDollars per shirtl

Explanation / Answer

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P Q TC MC TR MR Profit 25 0 15 0 -15 25 1 25 10 25 25 0 25 2 30 5 50 25 20 25 3 40 10 75 25 35 25 4 55 15 100 25 45 25 5 75 20 125 25 50 25 6 105 30 150 25 45 25 7 150 45 175 25 25

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