Suppose Dina runs a small business that manufactures trying pans. Assume that the market for frying pans is a competitive market, aid the market price is $20 per frying pan. The following graph shows Dina's total cost curve.
A. Use the blue points to plot total revenue and the green points to plot profit for the first seven frying pans that Dina produces, including zero frying pans.
B. Calculate Dina's marginal revenue and marginal cost for the first 7 frying pans she produces. Plot them on the graph. Use the blue points to plot total revenue and the green points to plot profit for the first seven frying pans that Dina produces, including zero frying pans.
C. Dian's profit is maximum when she produces _____ frying pans. When she does this, the marginal cost of the last frying pan she produces is ____, which is _____ than the price that Dina receives for each frying pan she sells. The marginal cost of producing an additional frying pan (that is, one more frying pan that would maximize her profit) is _____ which is _____ than the price that Dina receives for each frying pan she sells.
D. Therefore, Diana's profit maximization quantity corresponds to the interaction of ___________ and __________ curves. Because Dina is a price taker this last condition can also be written as _______________.
