FIGURE 2.8
Marginal Revenue and
Marginal Cost
In part (a), total profit
is shown as the
difference between
total revenue and total
cost. In part (b), the
firm’s optimal output
occurs where the
marginal revenue and
marginal cost curves
intersect.
0246 8
200
100
0
–100
–200
Quantity (Lots)
400
300
200
100
0
–100
0246 8
Total Revenue, Cost, and Profit (Thousands of Dollars)
Total cost
Revenue
Profit
Marginal cost
Marginal profit
Marginal revenue
Marginal Revenue and Cost (Thousands of Dollars)
(a)
(b)
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