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Home Q & A Board Other Fields Homework Help Business Economics
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Ryanteck Ryanteck
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6 years ago
The Specialty Cake Store, a monopolistically competitive firm, is producing 200 decorated cakes per day and selling each cake for $17. At that production level ATC is $20, AVC is $15, AFC is $5, and both MR and MC are $8. This firm should
A) increase output to the point where price equals marginal cost.
B) shutdown and produce zero cakes and just pay fixed costs.
C) continue to produce 200 cakes, as price is greater than AVC.
D) decrease output to the point where price equals average total cost.
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Akshtsaklani21Akshtsaklani21
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6 years ago
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3 years ago
Thanks fo the correct answer
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