Question

Ashley bakes bread that she sells at the local farmer's market. If she purchases a new convection oven that reduces the costs of baking bread, what will be the impact on her profits?

1) Her profits will increase
2) Her profits will decrease
3) Her profits will remain the same
4) Cannot be determined

Answer 1

Adding a new convection oven that reduces the costs of baking bread will likely increase Ashley's profits.

Step-by-step explanation:

Adding a new convection oven that reduces the costs of baking bread will likely have a positive impact on Ashley's profits. This is because the reduced costs of production will increase her profit margin. With lower baking costs, she can either maintain the same price for her bread and increase her profits, or she can lower the price of her bread to attract more customers, potentially increasing her overall sales and profits.