Afirm sells a product in a purely competitive market. the marginal cost of the product at the current output level of 800 units is $3.50. the minimum possible average variable cost is $3. the market price of the product is $4. to maximize profits, the firm should
a. shut down if the minimum possible average cost is $5.25
b. shut down if the minimum possible average variable cost is $4.75
c. increase output if the minimum possible average variable cost is $5.25
d. decrease output if the minimum possible average variable cost is $4.75

Jimmy's delicatessen sells large tins of tom tucker's toffee. the deli uses a periodic review system, checking inventory levels every 88 days, at which time an order is placed for more tins. order lead time is 22 days. daily demand is a constant 1515 tins, so average demand during the reorder period and order lead time (1010 days) is 150150 tins. draw a sawtooth diagram. assume that the beginning inventory level is equal to the restocking level and the desired service level is 99.9%. what is the safety stock level? (hint: look at the formula for calculating restocking level.) what is the average inventory level? the safety stock level is average inventory level is __chart: time (10,20,30), tins (0,150) lines touching both axisthe safety stock level is 0 tinsthe average inventory level is 75 tins