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LN Bakery must decide how many cream cakes to prepare for the upcoming weekend. Cream cakes cost $32 each to make, and LN sells for $60 each. Unsold cream cakes are reduced to half-price on Monday, an...

a. What product does LN Bakery need to prepare for the weekend?

Cream cakes
b. What is the cost of making one cream cake?
$32.00
c. What happens to unsold cream cakes on Monday?
They are reduced to half-price

User AMDI
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1 Answer

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Final answer:

LN Bakery must decide on the quantity of cream cakes to prepare, accounting for production costs and potential pricing strategies for unsold goods, paralleling situations of changing business models and price adjustments like those at a coffee shop or experienced by Netflix customers.

Step-by-step explanation:

LN Bakery faces a decision related to their product pricing strategy similar to an instance where a coffee shop changes its pricing model, requiring customers to pay extra for creamer and sweetener which were previously included. Moreover, it resembles the scenario in 2011 when Netflix customers had to deal with a 60% price hike to maintain the same level of service they had previously enjoyed. In the case of LN Bakery, the decision revolves around how many cream cakes to prepare for the upcoming weekend, considering the cost of production and potential price reduction for unsold items.

User SanBen
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