Laura is a gourmet chef who runs a small catering business in a competitive industry. Laura specializes in making wedding cakes. Laura sells 20 wedding cakes per month. Her monthly total revenue is $5,000 . The marginal cost of making a wedding cake is $200 . In order to maximize profits, Laura should
a. make more than 20 wedding cakes per month.
b. make fewer than 20 wedding cakes per month.
c. continue to make 20 wedding cakes per month.
d. We do not have enough information to answer the question.
a
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As real disposable income increases, we expect the average propensity to consume (APC)
A) to always be below MPC. B) to increase. C) to remain unchanged. D) to decrease.
The production and cost information provided in the table above for Flaming Fernando's, a restaurant that sells Fiery Frijoles, is for the
A) short run because there are no variable costs. B) short run because there is a fixed cost. C) long run because there are no variable costs. D) long run because there are no fixed costs. E) short run and long run because the total cost increases as production increases.
Intellectual property
A) is protected by common law rather than by written laws. B) is protected by people's sense of decency rather than by written laws. C) belongs to everyone with the necessary human capital to use it. D) is often protected by copyrights and patents.
When marginal cost is below average total cost:
a. total cost is falling. b. total cost is rising. c. average total cost is falling. d. average fixed cost is rising. e. total variable cost is falling.