Jessica owns a company that makes pre-packaged sandwiches for convenience stores. The market price for a sandwich is $5 and Jessica is a price-taker. Her daily variable cost for making sandwiches is C(Q) = 2.5Q + (Q2/40) and her marginal cost is MC = 2.5 + (Q/20). What is the average cost of a sandwich at the quantity of sandwiches Jessica should be selling each day?
A. $1.25
B. $2.50
C. $3.75
D. $6.25
C. $3.75
You might also like to view...
When average cost is greater than marginal cost, marginal cost must be
a. rising. b. falling. c. constant. d. The direction of change in marginal cost cannot be determined from this information.
Why does the Federal Funds rate face a zero bound?
What will be an ideal response?
Consumer equilibrium occurs where the budget line is tangent to the:
A. lowest possible indifference curve. B. highest possible indifference curve. C. utility maximizing indifference curve. D. utility equalization indifference curve.
A shift in the consumption function:
a. is based on the marginal propensity to consume. b. can be caused by a change in the price level. c. can be caused by a change in GDP. d. None of these.