Suppose Jason Owns a Small Pastry Shop

question 44

Multiple Choice

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

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

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Definitions:

Negative Reinforcement

The termination of an aversive event, which reinforces the behavior that preceded it.

Escape

A type of behavior or response aimed at getting away from an unpleasant or aversive situation.

Unpleasant

An emotional response to stimuli that are considered to be disagreeable, uncomfortable, or distressing.

Passive Avoidance

A learning process where an individual learns to withhold a specific behavior to prevent an unpleasant outcome, often studied in the context of fear conditioning.