Becky's Bakery Sells Three Large Muffins for Every Two Small

question 146

Multiple Choice

Becky's Bakery sells three large muffins for every two small ones. A small muffin sells for $3.00, with a variable cost of $2.00. A large muffin sells for $5.00 with a variable cost of $2.50. What is the weighted-average contribution margin? (Round your intermediate calculations to one decimal place)

• A)$1.93 per muffin
• B)$1.75 per muffin
• C)$1.25 per muffin
• D)$1.90 per muffin

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Definitions:

Perfectly-Elastic

Describes a situation where the quantity demanded or supplied responds infinitely to changes in price.

Marginal Revenue

The additional income earned from selling one more unit of a good or service.

Marginal Cost

The cost of producing one additional unit of a product or service, crucial for economic decision-making and pricing strategies.

Marginal Revenue

Additional earnings received from marketing one more unit of a good or service.