Suppose Jason Owns a Small Pastry Shop

question 273

Multiple Choice

Suppose Jason owns a small pastry shop.Jason wants to maximize his profit,and thinking back to the college 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:

Fecal Matter

Solid or semisolid waste material from the digestive tract that is expelled through the anus during defecation.

Humus Material

Organic component of soil, formed by the decomposition of leaves and other plant material by soil microorganisms.

Drought-Resistant

Traits in plants that enable them to survive with minimal water.

Species

A group of living organisms consisting of similar individuals capable of exchanging genes or interbreeding, forming the basic category in biological classification.