321/quizzes/79438/take Question 27 1 pt Jennifer\'s Bakery Shop produces baked g

Question

321/quizzes/79438/take Question 27 1 pt Jennifer's Bakery Shop produces baked goods in a perfectly competitive market. If Jennifer decides to produce her 100th batch of cookies, the marginal cost is $120. She can sell this batch of cookies at a market price of $110. To maximize her profit, Jennifer should produce this batch of cookies because their MR exceeds their MC. O not produce this additional batch O produce this batch of cookies because they will help lower her average fixed cost O shut down. O charge $120 for this batch. ! nsertpr

Explanation / Answer

The corect option is e) because under perfectly competitive market the equiibrium condition is price = marginal cost. Therefore she must charge $120 for the the 100th batch of cookies.

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