Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Per Hour (Q)Price (P)Total Cost (TC)0$6.00$1.5015.506.0025.009.5034.5012.5044.0015.0053.5017.0063.0018.5072.5020.5082.0023.50a. To maximize profits, Maria should sellnothing loaves of ciabatta bread per hour. (Enter your response as an integer.)

For profit-maximization, firms have to take into the total-cost(TC) and the total revenue(TR) from their production activity. They will produce that qty at which either the difference b/w the TR & TC is maximized, or MR = MC.To maximize-profits, Maria will produce 4 units and sell each unit for $4. At this qty, the two rules of profit-maximization are satisfied: MR = MC MC cuts MR from below. After this point, the MC will become greater than the MR. Therefore, less profitable for the firm to produce.

Answered: Maria manages a bakery, that…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs:

Ciabatta Bread Sold Per Hour (Q)	Price (P)	Total Cost (TC)
0	$6.00	$1.50

1	5.50	6.00
2	5.00	9.50
3	4.50	12.50
4	4.00	15.00
5	3.50	17.00
6	3.00	18.50
7	2.50	20.50
8	2.00	23.50

a. To maximize profits, Maria should sell

nothing loaves of ciabatta bread per hour. (Enter your response as an integer.)

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