Ricky's Donuts sells premium donuts.  Premium donuts have toppings. The demand for premium (PR) donuts is: PPR = 5.70 - 0.45QPR The marginal cost for each is: MCPR = 0.20 Now Ricky starts selling cupcakes.  This creates an opportunity cost of 0.10 per premium donut as those toppings cannot be used for cupcakes.  Which of the following statements is true? Ricky's Donuts sells premium donuts.  Premium donuts have toppings. The demand for premium (PR) donuts is: PPR= 5.70 - 0.45QPR The marginal cost for each is: MCPR= 0.20 Now Ricky starts selling cupcakes.  This creates an opportunity cost of 0.10 per premium donut as those toppings cannot be used for cupcakes.  Which of the following statements is true? With the opportunity cost, Ricky should produce 9 premium donuts The opportunity cost will increase profit The opportunity cost will change the minimum average cost The opportunity cost will increase fixed costs With the opportunity cost, more premium donuts will be produced

Economics For Today
10th Edition
ISBN:9781337613040
Author:Tucker
Publisher:Tucker
Chapter1: Introducing The Economic Way Of Thinking
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Problem 7SQ
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Ricky's Donuts sells premium donuts.  Premium donuts have toppings.

The demand for premium (PR) donuts is: PPR = 5.70 - 0.45QPR

The marginal cost for each is:

MCPR = 0.20

Now Ricky starts selling cupcakes.  This creates an opportunity cost of 0.10 per premium donut as those toppings cannot be used for cupcakes. 

Which of the following statements is true?

Ricky's Donuts sells premium donuts.  Premium donuts have toppings.

The demand for premium (PR) donuts is: PPR= 5.70 - 0.45QPR

The marginal cost for each is:

MCPR= 0.20

Now Ricky starts selling cupcakes.  This creates an opportunity cost of 0.10 per premium donut as those toppings cannot be used for cupcakes. 

Which of the following statements is true?

With the opportunity cost, Ricky should produce 9 premium donuts
The opportunity cost will increase profit
The opportunity cost will change the minimum average cost
The opportunity cost will increase fixed costs
With the opportunity cost, more premium donuts will be produced
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