Create a marginal cost analysis graph and then answer the five reflection questions.

  1. Select a product. It can be real or made up. Give your good or service a name and a price in U.S. dollars. Identify the market type for your product (pure/perfect competition, monopolistic competition, oligopoly, monopoly).
  2. Draw a marginal analysis graph. Title it the market for the product you chose. Label the axes, the marginal cost curve (MC), the marginal revenue curve (MR), and the profit-maximizing quantity (Qpm). You do not need to use real numbers.
  3. Answer the reflection questions in complete sentences:
    • What is your product and its price? What type of market does your product exist in?
    • Why is the marginal cost curve the same basic shape, no matter the product?
    • At the profit-maximizing quantity, is the price of your product equal to, higher than, or lower than marginal cost? Explain.
    • Assume Qpm is 100 units. What is your total revenue?
    • Why would an already-successful business owner conduct a marginal cost analysis for their product?


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