Math Problem Statement
A bakery can sell 800 cupcakes at $3 each, or 1,000 cupcakes at $2.50 each. Charging a price of $2.50/cupcake would increase this bakery's profits as long as _____________.
A.
their current total costs from making cupcakes are less than $2,500.
B.
the marginal costs of cupcakes are less than $0.50.
C.
the marginal costs of cupcakes are less than $2.50.
D.
the average costs of cupcakes are less than $3.00.
Solution
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Math Problem Analysis
Mathematical Concepts
Marginal Cost
Profit Maximization
Revenue
Formulas
Revenue = Price × Quantity
Profit = Revenue - Total Cost
Marginal Cost = Change in Total Cost / Change in Quantity
Theorems
Marginal Cost and Profit Relationship
Suitable Grade Level
Grades 10-12
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