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Figure 12.2.4 Refer to Figure 12.2.4, which shows the market for Granni...

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A graph plots price and cost (dollar per cake) versus Quantity (cakes per week).In the graph, the horizontal axis ranges from 0 to 24 with an increment of 2 units. The vertical axis ranges from 0 to 40 with an increment of 4 units. The graph plots two slopes from top left to mid-right and bottom left respectively, a convex curve from bottom left to top right, and four closed points (2, 36), (12, 28), (12, 16), and (16, 24). The first slope falls through (0, 40) to (20, 0) is labeled M R, and the second slope falls through (0, 40) to (24, 16) is labeled D. The convex curve rises through (4, 6), (12, 16), (16, 24) to (20, 40) is labeled M C.

Figure 12.2.4

Refer to Figure 12.2.4, which shows the market for Grannie's, the only cake bakery on Coastal Island. What is Grannie's profit-maximizing price and output?

Grannie's profit-maximizing price is ________ and its profit-maximizing output is ________.

$16 a cake; 24 cakes a week

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$24 a cake; 16 cakes a week

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$16 a cake; 12 cakes a week

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$28 a cake; 12 cakes a week

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$36 a cake; 2 cakes a week

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