Suppose you are the owner of a firm producing jelly beans, with average costs shown below....
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Suppose you are the owner of a firm producing jelly beans, with average costs shown below. Initially, you produce 200 cases of jelly beans per time period. Then, a new customer calls and places an order for a case, requiring you to increase your output to 201 cases. She offers you $600 for the case. Should you produce it? Average Cases Total (q) Cost (ATC) 200 $100 201 $103 202 $106 203 $109 204 $112 O Yes O No Suppose you are the owner of a firm producing jelly beans, with average costs shown below. Initially, you produce 200 cases of jelly beans per time period. Then, a new customer calls and places an order for a case, requiring you to increase your output to 201 cases. She offers you $600 for the case. Should you produce it? Average Cases Total (q) Cost (ATC) 200 $100 201 $103 202 $106 203 $109 204 $112 O Yes O No
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Yes you should produce it because your average total cost is 103 and the customer is willin... View the full answer
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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