-Tammy Sells Woolen Hats in a Perfectly Competitive Market

question 175

Multiple Choice

-Tammy sells woolen hats in a perfectly competitive market. The marginal cost of producing 1 hat is $24. The marginal cost of producing a second hat is $26 and the marginal cost of producing a third hat is $28. The market price of a hat is $26. To maximize profit, Tammy produces ________ per day.

• A) 1 hat
• B) 3 hats
• C) 2 hats
• D) as many hats as possible

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Definitions:

Isabella of Castile

Queen of Castile from 1474 and, through marriage to Ferdinand II of Aragon, a queen of Aragon, which led to the unification of Spain under their grandson, Charles V.

Ferdinand of Aragon

Was a monarch of the late 15th and early 16th centuries, who, along with his wife Isabella of Castile, is famous for the completion of the Reconquista and the funding of Christopher Columbus's 1492 voyage.

United

Refers to entities or individuals joined together towards a common goal or forming a single entity.

Medieval Weapon

Weapons used during the Middle Ages in Europe, including swords, bows, spears, and various types of siege engines.