Suppose Yakov runs a small business that manufactures shirts. Assume that Yakov is a price taker, and the market price is $20 per shirt. The following table represents Yakov's cost structure per hour: If Yakov produces and selis three shirts, his total revenue (TR) would be and his profit would be . Yakov's marginal revenue (MR) from third shirt he sells is , and his marginal cost (MC) of producing a third shirt is The following graph shows Yakov's total cost curve (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 Yakov produces, including zero shirts. Hint: You will have to plot eight points for each line. Plot your points in the order in which you would like them connected, Line segments will conne the points automatically. COST, REVENUE, AND PROFIT (Dollars per hour) Calculate Yakov's marginal revenue and marginal cost for the first seven shirts he produces and plot them on (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost. shirts per hour. When he does this, the marginal cost of the last shir As the graphs indicate, Yakov's profit is maximized when he produces he produces is additional shirt (that is, one more shich is than would maximize his profit) is , which is than the price Yakov receives each shirt he selis. Therefore, Yakov's profit-maximizing quantity corresponds to the intersection of the curves. Because Yakov is a price taker, this last condition can aiso be written as