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Suppose Sarah Owns a Small Company That Makes Wedding Cakes

Question 102

Multiple Choice

Suppose Sarah owns a small company that makes wedding cakes. The accompanying table shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day.  Number of Cales Per Day  Tatal Cast Per Day 0$1001$1802$2203$3004$4005$5206$660\begin{array} { | c | c | } \hline \text { Number of Cales Per Day } & \text { Tatal Cast Per Day } \\\hline 0 & \$ 100 \\\hline 1 & \$ 180 \\\hline 2 & \$ 220 \\\hline 3 & \$ 300 \\\hline 4 & \$ 400 \\\hline 5 & \$ 520 \\\hline 6 & \$ 660 \\\hline\end{array}  
If the market for wedding cakes is perfectly competitive, and wedding cakes sell for $95 each, then at her profit-maximizing level of output, Sarah will earn a ________ of ________ per day.


A) loss; $100
B) loss; $15
C) profit; $15
D) profit; $285

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