The Above Table Shows the Daily Production Possibilities for a Bakery

question 39

Multiple Choice

The above table shows the daily production possibilities for a bakery.
Currently the bakery bakes 60 pizzas and 180 loaves of bread, that is at alternative C.
-Using the above table, what is the opportunity cost of moving from alternative C to alternative D?

• A) 60 loaves of bread
• B) 2 loaves of bread
• C) 30 loaves of bread
• D) 1/2 loaf of bread

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Definitions:

Maximize Profit

To maximize profit, a firm seeks to increase the difference between its total revenues and total costs through optimal pricing strategies and efficient production.

Marginal Cost

Marginal cost represents the increase or decrease in the total cost of production when the quantity produced is incremented by one unit.

Purely Competitive Firm

A business that operates in a market with many buyers and sellers, where each firm has no control over the market price and produces a homogeneous product.

Maximize Profit

The economic goal of efficiently allocating resources in production to achieve the highest possible return or profit.