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:

Bagel Company

A business that specializes in the production and sale of bagels, often including various flavors and toppings.

Resources Used

Refers to the various materials, capital, and human resources that are utilized in the production of goods or services.

Due Date

The specific day by which something is due or expected to be completed, such as a payment or assignment.

Product Completion

The final stage in the production process where a product is finished and ready for sale.