ᴀ ꜱᴍᴀʟʟ ꜱʜᴏᴘ ꜰᴀʙʀɪᴄᴀᴛᴇꜱ ᴘᴏʀᴛᴀʙʟᴇ ᴛʜʀᴇꜱʜᴇʀꜱ ꜰᴏʀ ᴘᴀʟᴀʏ ᴘʀᴏᴅᴜᴄᴇʀꜱ ɪɴ ᴛʜᴇ ʟᴏᴄᴀʟɪᴛʏ. ᴛʜᴇ ꜱʜᴏᴘ ᴄᴀɴ ᴘʀᴏᴅᴜᴄᴇ ᴇᴀᴄʜ ᴛʜʀᴇꜱʜᴇʀ ᴀᴛ ʟᴀʙᴏʀ ᴄᴏꜱᴛ ᴏꜰ ᴘ1800. ᴛʜᴇ ᴄᴏꜱᴛ ᴏꜰ ᴍᴀᴛᴇʀɪᴀʟꜱ ꜰᴏʀ ᴇᴀᴄʜ ᴜɴɪᴛ ɪꜱ ᴘ2, 500. ᴛʜᴇ ᴠᴀʀɪᴀʙʟᴇ ᴄᴏꜱᴛꜱ ᴀᴍᴏᴜɴᴛ ᴛᴏ ᴘ650 ᴘᴇʀ ᴜɴɪᴛ, ᴡʜɪʟᴇ ꜰɪxᴇᴅ ᴄʜᴀʀɢᴇꜱ ɪɴᴄᴜʀʀᴇᴅ ᴘᴇʀ ᴀɴɴᴜᴍ ᴛᴏᴛᴀʟꜱ ᴘ69, 000. ɪꜰ ᴛʜᴇ ᴘᴏʀᴛᴀʙʟᴇ ᴛʜʀᴇꜱʜᴇʀꜱ ᴀʀᴇ ꜱᴏʟᴅ ᴀᴛ ᴘ7, 800 ᴘᴇʀ ᴜɴɪᴛ, ʜᴏᴡ ᴍᴀɴʏ ᴜɴɪᴛꜱ ᴍᴜꜱᴛ ʙᴇ ᴘʀᴏᴅᴜᴄᴇᴅ ᴀɴᴅ ꜱᴏʟᴅ ᴘᴇʀ ᴀɴɴᴜᴍ ᴛᴏ ʙʀᴇᴀᴋ-ᴇᴠᴇɴ?

ᴀ ꜱᴍᴀʟʟ ꜱʜᴏᴘ ꜰᴀʙʀɪᴄᴀᴛᴇꜱ ᴘᴏʀᴛᴀʙʟᴇ ᴛʜʀᴇꜱʜᴇʀꜱ ꜰᴏʀ ᴘᴀʟᴀʏ ᴘʀᴏᴅᴜᴄᴇʀꜱ ɪɴ ᴛʜᴇ ʟᴏᴄᴀʟɪᴛʏ. ᴛʜᴇ ꜱʜᴏᴘ ᴄᴀɴ ᴘʀᴏᴅᴜᴄᴇ ᴇᴀᴄʜ ᴛʜʀᴇꜱʜᴇʀ ᴀᴛ ʟᴀʙᴏʀ ᴄᴏꜱᴛ ᴏꜰ ᴘ1800. ᴛʜᴇ ᴄᴏꜱᴛ ᴏꜰ ᴍᴀᴛᴇʀɪᴀʟꜱ ꜰᴏʀ ᴇᴀᴄʜ ᴜɴɪᴛ ɪꜱ ᴘ2, 500. ᴛʜᴇ ᴠᴀʀɪᴀʙʟᴇ ᴄᴏꜱᴛꜱ ᴀᴍᴏᴜɴᴛ ᴛᴏ ᴘ650 ᴘᴇʀ ᴜɴɪᴛ, ᴡʜɪʟᴇ ꜰɪxᴇᴅ ᴄʜᴀʀɢᴇꜱ ɪɴᴄᴜʀʀᴇᴅ ᴘᴇʀ ᴀɴɴᴜᴍ ᴛᴏᴛᴀʟꜱ ᴘ69, 000. ɪꜰ ᴛʜᴇ ᴘᴏʀᴛᴀʙʟᴇ ᴛʜʀᴇꜱʜᴇʀꜱ ᴀʀᴇ ꜱᴏʟᴅ ᴀᴛ ᴘ7, 800 ᴘᴇʀ ᴜɴɪᴛ, ʜᴏᴡ ᴍᴀɴʏ ᴜɴɪᴛꜱ ᴍᴜꜱᴛ ʙᴇ ᴘʀᴏᴅᴜᴄᴇᴅ ᴀɴᴅ ꜱᴏʟᴅ ᴘᴇʀ ᴀɴɴᴜᴍ ᴛᴏ ʙʀᴇᴀᴋ-ᴇᴠᴇɴ?

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

Chapter16: Bargaining

Section: Chapter Questions

Problem 16.5IP

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