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Zoe's Bakery operates in a perfectly competitive industry. Suppose that when the market price is $5, the profit-maximizing output level of pastries is 150 units, with average total cost of $4, and average variable cost of $3. From this we know Zoe's marginal cost is ______, and Zoe's short-run profits are ______.

A. $5; $300.
B. $1; $300.
C. $1; $150.
D. $5; $150.

Respuesta :

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Answer:

(D) $5; $150

Explanation:

MR=MC, marginal cost is the market price, which is 5$.

And she is making a dollar per based on the average total cost;

so selling 150 =$1 ×150

= $150 .

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