Question

Laura is a gourmet chef who runs a small catering business in a competitive industry. Laura specializes in making wedding cakes. Laura sells 20 wedding cakes per month. Her monthly total revenue is $5,000. The marginal cost of making a wedding cake is $200. In order to maximize profits, Laura should a. continue to make 20 wedding cakes per month. b. make fewer than 20 wedding cakes per month. c. make more than 20 wedding cakes per month. d. We do not have enough information to answer the question.

Answer 1

Answer:

B.less cakes

Step-by-step explanation:

If she keeps making 20 cakes she will lose profit.

If she makes more she will lose profit.

She has to make less cakes to stop losing profits.

So the answer is B. Make less Cakes