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Motzi Bread in Baltimore bakes delicious bread. Bread shops are a (perfectly) competitive business in Baltimore. At its current production level, Motzi Bread estimates the
Motzi Bread in Baltimore bakes delicious bread. Bread shops are a (perfectly) competitive business in Baltimore. At its current production level, Motzi Bread estimates the following: | ||
Price per loaf of bread: $6 | ||
Average Variable Cost: $4 | ||
Average Total Cost: $7 | ||
Marginal Cost: $5 | ||
Based on this information and your knowledge of economics, which of the following should Motzi do? | ||
A | Keep production at the same level. | |
B | We need more information. | |
C | Increase Production | |
D | Decrease production | |
E | Shut down immediately. |
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