Multiple Choice
The above table shows the probability distribution of cake sales at Busy Betty's Bakery.
-Refer to the table above. Busy Betty sells her cakes for $20 each and her constant marginal cost to produce each cake is $12, which is equal to her (constant) average total cost. What is her expected marginal benefit from holding the 21st cake in inventory?
A) $6.10
B) $6.40
C) $8.00
D) $7.20
Correct Answer:
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