For this assignment, you will produce a marginal cost analysis graph and create a scenario that explains where the firm should set price and quantity levels.
Step One: Launch the data file to get started. Print or copy the data table before continuing to step two.
Step Two: Determine a product market (a specific good or service) appropriate to the prices listed. Make this the title of your graph and data table.
Step Four: Create a graph of the data. Quantity is along the x-axis and price is along the y-axis. Graph the marginal revenue curve and the marginal cost curve.
- Correctly label the x axis as quantity and y axis as price.
- Based on the data from your table, graph the marginal revenue curve. Label the curve MR.
- Based on the data from your table, graph the marginal cost curve. Label the curve MC.
Step Five: Answer the following reflection questions. You will submit your responses with your data table and graph to your instructor.
- What product market did you choose for this data to represent? Explain why.
- At which price and quantity does marginal cost nearly equal marginal revenue without exceeding it? Highlight this point on your graph.
- If you were in business for this product, at which price and quantity level would you sell? Explain why.