Suppose Jason Owns a Small Pastry Shop

question 39

Multiple Choice

Suppose Jason owns a small pastry shop.Jason wants to maximize his profit, and thinking back to the microeconomics class he took in college, he decides he needs to produce a quantity of pastries which will minimize his average total cost.Will Jason's strategy necessarily maximize profits for his pastry shop?

• A)Yes; since Jason's pastry shop is in a perfectly competitive market, the only way to maximize profit is to produce the quantity where average total cost is minimized.
• B)Not necessarily; this strategy will only maximize Jason's profit in the long run, but not in the short run.
• C)No; in order to maximize profit, Jason would never want to produce the quantity where average total cost is minimized.
• D)Not necessarily; depending on demand, Jason may maximize profit by producing a quantity other than that where average total cost is at a minimum.

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Definitions:

Semantic Barriers

Involve a poor choice or use of words and mixed messages.

Formal Channels

Official, established routes of communication or transmission of information within an organization.

Chain Of Command

The hierarchical structure within an organization that delineates authority, responsibility, and communication pathways.

Grapevine

An informal communication channel within organizations where information, often unverified or speculative, spreads quickly among employees.