Mamma Temte Bakes Six Pies a Day That Cost $2

question 88

Multiple Choice

Mamma Temte bakes six pies a day that cost $2 each to produce. On 15% of the days she sells only two pies. On30% of the days, she sells 4 pies, and on the remaining 55% of the days, she sells all six pies. If Mama Temtesells her pies for $6 each, what is her expected profit for a dayʹs worth of pies? [Assume that any leftover piesare given away.]

• A) $16.80
• B) $28.80
• C) -$6.00
• D) -$7.20

---

Definitions:

Production Costs

The expenses directly associated with the manufacturing of goods or services, including materials, labor, and overhead.

Economies Of Scale

The cost advantage that arises with increased output of a product, where the average cost per unit decreases as the scale of production expands.

International Trade

The exchange of goods, services, and capital between countries, driven by comparative advantages and market needs.

Domestic Producers

Businesses or manufacturers that produce goods within their own country rather than importing them from abroad.