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Author Question: The Specialty Cake Store, a monopolistically competitive firm, is producing 200 decorated cakes per ... (Read 185 times)

APUS57

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Question 1

A monopolistically competitive firm that is incurring a loss will shut down if


◦ marginal revenue is less than marginal cost.
◦ revenues are less than variable costs.
◦ price is less than average total cost.
◦ price is less than marginal cost.

Question 2

The Specialty Cake Store, a monopolistically competitive firm, is producing 200 decorated cakes per day and selling each cake for $12. At that production level 
ATC is $20, 
AVC is $15, 
AFC is $5, and both 
MR and 
MC are $8. This firm should


◦ continue to produce 200 cakes, as price is greater than 
AFC.
◦ increase output to the point where price equals marginal cost.
◦ decrease output to the point where marginal cost equals average cost.
◦ produce zero cakes and just pay fixed costs.


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Marked as best answer by APUS57 on Apr 19, 2019

iman

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APUS57

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Reply 2 on: Apr 19, 2019
:D TYSM


essyface1

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

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