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. If she does not sell a cake the day she makes it, she sells it as day- old cake for $10. What is her expected marginal cost of holding the 20th cake in inventory?
A) $0.20
B) $0.40
C) $10.00
D) $2.00
Correct Answer:
Verified
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