Happy Bagels sells its bagels for $6 each and the firm has a constant marginal cost of $4 per bagel, which is equal to its (constant) average total cost. If Happy Bagels does not sell a bagel the day it is produced, the bagel is sold as day-old for $2. If Happy Bagels is currently holding 50 bagels in inventory and the probability that Happy Bagels will sell 50 bagels or more is 0.50, which of
the following statements is true?
A) Happy Bagels is holding the profit-maximizing, optimal level of inventory.
B) To obtain the profit-maximizing, optimal level of inventory, Happy Bagels needs to increase its inventory.
C) To obtain the profit-maximizing, optimal level of inventory, Happy Bagels needs to decrease its inventory.
D) To obtain the profit-maximizing, optimal level of inventory, Happy Bagels needs to double its inventory.
A) Happy Bagels is holding the profit-maximizing, optimal level of inventory.
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In a particular year, if the real GDP of Country Y is $400,000 and the nominal GDP of Country Y is $450,000, the GDP deflator is ________
A) 115 B) 112.5 C) 102 D) 0.17
Consider an economy with only two goods: bread and wine. In 1982, the typical family bought 4 loaves of bread at 50¢ per loaf and 2 bottles of wine for $9 per bottle. In Year X, bread cost 75¢ per loaf and wine cost $10 per bottle. The CPI for Year X (using a 1982 base year) is:
a. 100. b. 115. c. 126. d. 130.
In each of the following scenarios, explain why the euro will appreciate or depreciate in a system of floating exchange rates. A) A recession in Germany cuts German purchases of American goods. B) American investors are attracted by prospects for profit on the Frankfurt Stock Exchange. C) Interest rates on government bonds rise in the U.S. but remain stable in Germany
The balance of payments is:
A. the accounting of trade in goods and capital. B. positive when a country has a trade deficit. C. the accounting of trade in financial assets. D. negative when a country has a trade surplus.