Suppose you have a job in production management. A portion of your costs are as in the table below: Quantity Average Total Cost JD 250 300 301 JD 251 Your current level of production is 300 units. All 300 units have been ordered by your regular customers. The phone rings. it's a new customer who wants to buy one unit of your product, offering JD 650 for the unit. You would have to increase production to 501 unit. Should you do it? a O Yes i should increase production to 501 unit and earn more profit. O No i shouldn't increase production to 501 unit because i will loose.

Suppose you have a job in production management. A portion of your costs are as in the table below: Quantity Average Total Cost JD 250 300 301 JD 251 Your current level of production is 300 units. All 300 units have been ordered by your regular customers. The phone rings. it's a new customer who wants to buy one unit of your product, offering JD 650 for the unit. You would have to increase production to 501 unit. Should you do it? a O Yes i should increase production to 501 unit and earn more profit. O No i shouldn't increase production to 501 unit because i will loose.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 4.2IP

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