Quiz_129 - 46 .,andthinkingbackto , . profi

Quiz_129 - 46 .,andthinkingbackto , . profi

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46) Suppose Jason owns a small pastry shop. Jason wants to maximize his profit, and thinking back tothe college microeconomics class he took in college, he decides he needs to produce a quantity ofpastries which will minimize his average total cost. Will Jasonʹs strategy necessarily maximizeprofits for his pastry shop?A) Yes; Since jasonʹs pastry shop is in a perfectly competitive market, the only way to maximizeprofit is to produce the quantity where average total cost is minimized.B) Not necessarily; Depending on demand, Jason may maximize profit by producing a quantityother than that where average total cost is at a minimum.C) Not necessarily; This strategy will only maximize Jasonʹs profit in the long run, but not in theshort run.D) No; In order to maximize profit, Jason would never want to produce the quantity whereaverage total cost is minimized.Answer: B46)Diff: 2Page Ref: 436-437/436-437Topic: Short-Run Profit MaximizationLearning Outcome: Micro 15: Discuss the role of differentiation in monopolistic competition in comparison toother market conditionsAACSB: Reflective Thinking
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