Sobeys Sells Fruit Trays Consisting of Pineapple and Melons

question 83

Multiple Choice

Sobeys sells fruit trays consisting of pineapple and melons. The manager of the fruit department obtains pineapples at a wholesale price of $2.50 per kg, and melons at $1.85 per kg. He is required to produce 10 kg of the mixed fruit. What is the maximum weight of pineapple that he can put in the mix in order to have an effective wholesale cost no greater than $2.00 per kg?

• A) 2.31 kg
• B) 7.69 kg
• C) 4.56 kg
• D) 4 kg
• E) 5.41 kg

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Definitions:

MC = MR

The condition where marginal cost equals marginal revenue, often used to determine the profit-maximizing level of production for a firm.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power due to differentiation.

Marginal Decision Rule

A principle stating that an action should be taken if and only if the marginal benefits outweigh the marginal costs.

Dry-Cleaning Market

The sector of the economy that provides services of cleaning clothes and textiles using a chemical solvent rather than water.