Bruno makes tamales to sell at the local farmer's market, and each month he sells all he makes. Each month, tamales had been selling for $10 per dozen and Bruno made 80 dozen tamales at a total cost of $500
It costs Bruno $100 to rent a booth at the farmer's market. This month, as Bruno is getting ready to pay management the $100 booth rental fee and display his tamales, he discovers that he will need to cut his price to $5 per dozen to compete with other tamale sellers. Bruno should A) not pay the booth rental fee and not set up his booth because he has already spent $500 to make his tamales and will only receive $400 by selling them.
B) only set up his booth if he does not have to pay the booth rental fee because then he will at least break even.
C) go ahead and pay the fee and set up his booth because the marginal benefit of selling his tamales is $400 and the marginal cost is $100.
D) not set up his booth this month because the marginal benefit of selling his tamales is $400 and the marginal cost is $600.
C
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