Discussion:
Show all of your calculations and processes. Describe your answer for each item below in complete sentences, whenever it is necessary.
a. Describe and derive an expression for the marginal cost (MC) curve.
b. Describe and estimate the incremental costs of the extra 200 pairs per week (from 1,000 pairs to 1,200 pairs of shoes).
c. What are the profit-maximizing price and output levels for Paradise Shoes? Describe and calculate the profit-maximizing price and output.
d. Discuss whether or not Paradise Shoes should expand its output further beyond 1,200 pairs per week. State all assumptions and qualifications that underlie your recommendation.