Zoe's Bakery operates in a perfectly competitive industry. When the market price of iced cupcakes is $5, the profit-maximizing output level is 150 cupcakes. Her average total cost is $4, and her average variable cost is $3. Zoe's marginal cost is _, and her short-run profits are _.

A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market participants are price takers. Market price is set by the forces of demand and supply.

Marginal revenue = marginal cost = price = $5

Profit = Total revenue - Total cost

Profit = ($5 - $4) x $150 = $150

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Zoe's Bakery operates in a perfectly competitive industry. When the market price of iced cupcakes is $5, the profit-maximizing output level is 150 cupcakes. Her average total cost is $4, and her average variable cost is $3. Zoe's marginal cost is _____, and her short-run profits are _____.

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Zoe's Bakery operates in a perfectly competitive industry. When the market price of iced cupcakes is $5, the profit-maximizing output level is 150 cupcakes. Her average total cost is $4, and her average variable cost is $3. Zoe's marginal cost is _, and her short-run profits are _.