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sgy_89 sgy_89
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7 years ago
Steve's Pizzeria currently bakes 100 pizzas per week which it sells at a price of $15 per pizza. Steve believes he could sell 120 pizzas each week if he lowered price to $14 per pizza. If it costs $10 to prepare each additional pizza, should Steve lower price and increase production?
A) Yes. He will sell each pizza for $14, a price that greatly exceeds their $10 cost.
B) No. It will cost him an additional $200 to make the 20 additional pizzas but they generate only $180 of additional revenue.
C) Yes. It will cost him only an additional $200 to make the 20 additional pizzas but they generate $280 of additional revenue.
D) No. Firms should never consider lowering the price of their products.
E) Yes. Firms should always try to sell as much of their product as possible.
Textbook 
Introduction to Economic Reasoning

Introduction to Economic Reasoning


Edition: 8th
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hecosmetichecosmetic
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sgy_89 Author
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7 years ago
Good timing, thanks!
vernonb
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Yesterday
Thanks
2ne1_12345
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2 hours ago
Brilliant ツ
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