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What most likely will happen if the pie maker bakes a seventh pie?

a) The marginal cost will most likely decrease to $1.00
b) The marginal cost will most likely increase to $2.00
c) The marginal revenue will most likely remain the same, not decrease to $8.00.
d) The marginal revenue will most likely remain the same, not increase to $12.00.

2 Answers

3 votes

Final answer:

If producing a seventh pie means producing beyond the point where marginal cost equals marginal revenue, the marginal cost will likely increase and the marginal revenue will not, indicating the correct answer is that the marginal cost will most likely increase.

Step-by-step explanation:

The question asks what would happen to the marginal cost or marginal revenue if a pie maker bakes a seventh pie. In economic terms, marginal cost refers to the cost of producing one additional unit of a good, while marginal revenue is the additional income from selling one more unit of a good.

Based on the information that examines increasing production levels and how this affects profits, if production is increased beyond the point where marginal cost equals marginal revenue, as seen in the case of increasing from 80 to 90 packs, the marginal cost would exceed marginal revenue, leading to reduced profits.

Therefore, if the pie maker bakes a seventh pie, and this action goes beyond the point where marginal revenue equals marginal cost, the marginal cost would most likely increase, and the marginal revenue would not increase.

User Stephen Paulger
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5 votes

Answer:

The marginal cost will most likely increase to $2.00

Step-by-step explanation:

Took the test review

User Erik Melkersson
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7.1k points