Jill Johnson owns a pizzeria. She currently produces 10,000 pizzas per month at a total cost of 500. If she produced one more pizza her total cost rises to 500.11. What does this tell us about Jill's marginal cost of producing pizzas?
A) The marginal cost of producing pizzas cannot be determined without more information.
B) The marginal cost of producing pizzas is rising.
C) The marginal cost of producing pizzas is constant.
D) The marginal cost of producing pizzas is falling.
Question 2
Buffalo Wild Wings CEO Sally Smith decided to spend more than 200 million on restaurant renovations in an attempt to attract more lunch customers and more families.
Like CEOs of other monopolistically competitive firms, Smith knew that without innovating
A) her firm would become perfectly competitive.
B) her firm had no chance of remaining in business.
C) her firm would eventually earn an accounting profit of zero.
D) her firm's profits would eventually be competed away by other firms.
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