Answer :
Let's carefully analyze the situation with the data provided for the pie production and consider the four given statements to determine what will most likely happen if the pie maker bakes a seventh pie.
The table of costs and revenues for producing pies is as follows:
[tex]\[ \begin{tabular}{|c|c|c|c|c|c|} \hline \begin{tabular}{c} Pies \\ Produced \\ Per Day \end{tabular} & \begin{tabular}{c} Total \\ Cost \end{tabular} & \begin{tabular}{c} Marginal \\ Cost \end{tabular} & \begin{tabular}{c} Total \\ Revenue \end{tabular} & \begin{tabular}{c} Marginal \\ Revenue \end{tabular} & Profit \\ \hline 0 & \$0.00 & \$0.00 & - & - & \$0.00 \\ \hline 1 & \$1.00 & \$1.00 & \$10.00 & \$10.00 & \$9.00 \\ \hline 2 & \$1.50 & \$0.50 & \$20.00 & \$10.00 & \$18.50 \\ \hline 3 & \$1.75 & \$0.25 & \$30.00 & \$10.00 & \$28.25 \\ \hline 4 & \$2.25 & \$0.50 & \$40.00 & \$10.00 & \$37.75 \\ \hline 5 & \$3.50 & \$1.25 & \$50.00 & \$10.00 & \$46.50 \\ \hline 6 & \$5.00 & \$1.50 & \$60.00 & \$10.00 & \$55.00 \\ \hline \end{tabular} \][/tex]
Now, consider the four statements about what will most likely happen if the pie maker bakes a seventh pie:
1. The marginal cost will most likely decrease to \[tex]$1.00. Looking at the trend of the marginal costs: - From pie 1 to pie 2, the marginal cost decreased from \$[/tex]1.00 to \[tex]$0.50. - From pie 2 to pie 3, it decreased further to \$[/tex]0.25.
- From pie 3 to pie 4, it increased back to \[tex]$0.50. - From pie 4 to pie 5, it increased to \$[/tex]1.25.
- From pie 5 to pie 6, it increased to \[tex]$1.50. Given the trend, the marginal cost of producing an additional pie after the sixth seems to be increasing overall. Thus, it is unlikely to decrease to \$[/tex]1.00.
2. The marginal cost will most likely increase to \[tex]$2.00. Analyzing the trend in marginal cost increases: - The marginal cost increased by \$[/tex]0.75 from pie 4 to pie 5.
- The marginal cost further increased by \[tex]$0.25 from pie 5 to pie 6. Given these observations, it is plausible that the marginal cost will continue to increase for the seventh pie. Therefore, an increase in marginal cost to \$[/tex]2.00 is a reasonable expectation.
3. The marginal revenue will most likely decrease to \[tex]$8.00. Marginal revenue has been consistent at \$[/tex]10.00 for each pie produced from 1 to 6. However, economic principles suggest diminishing returns at higher production levels due to market saturation or increasing competition. Thus, it is plausible that the marginal revenue might start to decrease if additional pies flood the market. Therefore, the marginal revenue could decrease to \[tex]$8.00. 4. The marginal revenue will most likely increase to \$[/tex]12.00.
Given the current trend, there has been no increase in the marginal revenue provided in the data. There has been a constant revenue of \[tex]$10.00 per pie, and without any new market changes or strategies, there is no indication that the marginal revenue will increase to \$[/tex]12.00.
Therefore, combining all the analyses:
- The marginal cost will not likely decrease to \[tex]$1.00. - The marginal cost will most likely increase to \$[/tex]2.00.
- The marginal revenue will most likely decrease to \[tex]$8.00. - The marginal revenue will not likely increase to \$[/tex]12.00.
So, the most likely outcomes are that the marginal cost will increase to \[tex]$2.00, and the marginal revenue will decrease to \$[/tex]8.00.
The table of costs and revenues for producing pies is as follows:
[tex]\[ \begin{tabular}{|c|c|c|c|c|c|} \hline \begin{tabular}{c} Pies \\ Produced \\ Per Day \end{tabular} & \begin{tabular}{c} Total \\ Cost \end{tabular} & \begin{tabular}{c} Marginal \\ Cost \end{tabular} & \begin{tabular}{c} Total \\ Revenue \end{tabular} & \begin{tabular}{c} Marginal \\ Revenue \end{tabular} & Profit \\ \hline 0 & \$0.00 & \$0.00 & - & - & \$0.00 \\ \hline 1 & \$1.00 & \$1.00 & \$10.00 & \$10.00 & \$9.00 \\ \hline 2 & \$1.50 & \$0.50 & \$20.00 & \$10.00 & \$18.50 \\ \hline 3 & \$1.75 & \$0.25 & \$30.00 & \$10.00 & \$28.25 \\ \hline 4 & \$2.25 & \$0.50 & \$40.00 & \$10.00 & \$37.75 \\ \hline 5 & \$3.50 & \$1.25 & \$50.00 & \$10.00 & \$46.50 \\ \hline 6 & \$5.00 & \$1.50 & \$60.00 & \$10.00 & \$55.00 \\ \hline \end{tabular} \][/tex]
Now, consider the four statements about what will most likely happen if the pie maker bakes a seventh pie:
1. The marginal cost will most likely decrease to \[tex]$1.00. Looking at the trend of the marginal costs: - From pie 1 to pie 2, the marginal cost decreased from \$[/tex]1.00 to \[tex]$0.50. - From pie 2 to pie 3, it decreased further to \$[/tex]0.25.
- From pie 3 to pie 4, it increased back to \[tex]$0.50. - From pie 4 to pie 5, it increased to \$[/tex]1.25.
- From pie 5 to pie 6, it increased to \[tex]$1.50. Given the trend, the marginal cost of producing an additional pie after the sixth seems to be increasing overall. Thus, it is unlikely to decrease to \$[/tex]1.00.
2. The marginal cost will most likely increase to \[tex]$2.00. Analyzing the trend in marginal cost increases: - The marginal cost increased by \$[/tex]0.75 from pie 4 to pie 5.
- The marginal cost further increased by \[tex]$0.25 from pie 5 to pie 6. Given these observations, it is plausible that the marginal cost will continue to increase for the seventh pie. Therefore, an increase in marginal cost to \$[/tex]2.00 is a reasonable expectation.
3. The marginal revenue will most likely decrease to \[tex]$8.00. Marginal revenue has been consistent at \$[/tex]10.00 for each pie produced from 1 to 6. However, economic principles suggest diminishing returns at higher production levels due to market saturation or increasing competition. Thus, it is plausible that the marginal revenue might start to decrease if additional pies flood the market. Therefore, the marginal revenue could decrease to \[tex]$8.00. 4. The marginal revenue will most likely increase to \$[/tex]12.00.
Given the current trend, there has been no increase in the marginal revenue provided in the data. There has been a constant revenue of \[tex]$10.00 per pie, and without any new market changes or strategies, there is no indication that the marginal revenue will increase to \$[/tex]12.00.
Therefore, combining all the analyses:
- The marginal cost will not likely decrease to \[tex]$1.00. - The marginal cost will most likely increase to \$[/tex]2.00.
- The marginal revenue will most likely decrease to \[tex]$8.00. - The marginal revenue will not likely increase to \$[/tex]12.00.
So, the most likely outcomes are that the marginal cost will increase to \[tex]$2.00, and the marginal revenue will decrease to \$[/tex]8.00.
