Suppose flora bakery is the monopolist in the market for banana bread. It’s fixed cost is 3 million. While it’s labour cost and ingredients for producing each pound of banana bread are $60 and $40 respectively.
Consumer are unwilling and unable to buy any banana bread when the price is $300 or above, however, the quantity demanded increases by 1000 pounds for each dollar the price drops.
How to calculate the marginal cost, average total cost?
1 answer
i'm not sure but clue that the marginal cost is what you should search on google