Use the Following to Answer Question

question 88

Multiple Choice

Use the following to answer question:
-(Table: Costs of Birthday Cakes) Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the marginal cost of the fifth cake?

• A)$2
• B)$10
• C)$12
• D)$20

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Definitions:

Price Takers

Businesses or individuals that accept the prevailing prices in the market because they do not have enough power to influence them.

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and products that are similar enough to be considered substitutes.

Market Supply Curve

A graphical representation showing the quantity of a good that producers are willing and able to sell at various prices within a specific time period.

Perfectly Elastic

Describes a situation where the quantity demanded or supplied responds infinitely to changes in price.