Suppose that the cost of production of laptop computers shows initially a brief span of decreasing marginal costs, followed by increasing marginal costs.
a. On the same graph as the total revenue curve you drew for problem #1a, draw a possible total cost curve for laptop computer production. For a given quantity Q1 (placed at any location you choose on the horizontal axis), show the corresponding profit.
b. On the same graph as the marginal revenue curve you drew for problem #1b, draw a possible marginal cost curve for laptop computer production. Indicate the profit maximizing output level.