Question

the cost of and return on pie production
pies produced per day total cost marginal cost total revenue marginal revenue profit
0 $0.00 $0.00 — — $0.00
1 $1.00 $1.00 $10.00 $10.00 $9.00
2 $1.50 $0.50 $20.00 $10.00 $18.50
3 $1.75 $0.25 $30.00 $10.00 $28.25
4 $2.25 $0.50 $40.00 $10.00 $37.75
5 $3.50 $1.25 $50.00 $10.00 $46.50
6 $5.00 $1.50 $60.00 $10.00 $55.00
what most likely will happen if the pie maker bakes a seventh pie?
the marginal cost will most likely decrease to $1.00
the marginal cost will most likely increase to $2.00
the marginal revenue will most likely decrease to $8.00.
the marginal revenue will most likely increase to $12.00.

Explanation:

Step1: Analyze marginal cost trend

Looking at the table, the marginal cost values are $1.00, 0.50, 0.25, 0.50, 1.25, 1.50$. It has been generally increasing.

Step2: Analyze marginal revenue trend

The marginal revenue has been a constant $10.00$ for each additional pie produced so far. So, it is unlikely to change from $10.00$.

Step3: Predict seventh - pie marginal cost

Based on the increasing trend of marginal cost, it is likely to increase further. Among the options, an increase to $2.00$ is a reasonable prediction considering the pattern of increase.

Answer:

The marginal cost will most likely increase to $2.00$