Betty's Bagels makes and sells bagels from their local bakery. If Betty's Bagels become more popular with local residents and the probability of selling additional bagels increases, Betty's expected marginal benefit curve from holding additional bagels in inventory will shift to the _______and the profit- maximizing number of bagels to hold in inventory will _______.

Question

Quizplus · Accepted Answer

If the probability of selling additional bagels increases, the expected marginal benefit curve will shift to the right indicating an increase in the profit-maximizing number of bagels to hold in inventory. This is because with higher demand, holding more bagels in inventory can generate higher profits due to the increased probability of selling them. Therefore, the best choice is C.

Betty's Bagels Makes and Sells Bagels from Their Local Bakery