Ashley,who Makes Knitted Caps,determines That Her Marginal Cost of Knitting

question 74

Multiple Choice

Ashley,who makes knitted caps,determines that her marginal cost of knitting one more cap is $10.A consumer offers her $12 for one more knitted cap.Ashley will:

• A)not sell the additional cap since she does not know what her total costs will be.
• B)sell the additional cap since the marginal revenue is greater than the marginal cost for the unit.
• C)realize that her production is not profitable and shut down her business.
• D)offer to sell 20 additional caps since it must be profitable.

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Definitions:

P(Z < 2)

The probability that a value Z, on a standard normal distribution, is less than 2.

Normal Distribution

A bell-shaped probability distribution characterized by its mean and standard deviation, indicating that data close to the mean are more prevalent.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, indicating how spread out the data points are.

Normally Distributed

Describes a distribution of data that forms a bell-shaped curve, symmetrical about its mean, implying that mean, median, and mode are equal.