Max is a home builder in the Midwest. Although sales have slowed because of the recession, it looks like the recession is about to end. He wants to be ready with material, labor, and foremen to meet the demand for housing. Last year Max built 40 starter homes. He thinks the recessions end will increase sales to 50 units for the current year. The going market price for this model has been $75,000. The cost of building this model averages $55,000.
A. based on these facts, what should Max do?
B. If the cost is raised to $65,000 what should he do?