(Solved): 3. Profit maximization using total cost and total revenue curves Suppose Amori operates a handicraf ...

3. Profit maximization using total cost and total revenue curves Suppose Amori operates a handicraft pop-up retail shop that sells cardigans. Assume a perfectly competitive market structure for cardigans with a market price equal to $\$25$ per cardigan. The following graph shows Aman's total cost curve. Use the biue points (arcle symbol) to plot total revenue and the green points (trrangle symbol) to plot pront for cardigans for quantites zeso through seven (including zero and seven) that Aman produces. Calculate Amari's marginal revenue and marginai cost for the first seven cardigans they produce, and ploc them on the following graph. Use the blue points (circle symboi) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. Amaris profit is maximized when they produce a total of cardigans. At this quantity, the marginal cost of the final cardigan they produce is , an amount than the price received for each cardigan they sell. At this point, the marginal cost of producing one more Cardigan (the first cardlgan beyond the profit maximizing quantity) is_, an amount, than the price received for each cardigan they sell. Therefore, Amari's profit-maximizing quantity occurs at the point of intersection between the curves. Because Amari is a price taker, the previous condition is equivaient to