A snowboard company currently hires 10 skilled employees who are paid a weekly wage of $1,000. The cost of capital is $3,000 and it is fixed, which means that it does not vary with output. The company is currently producing 240 snowboards. The company's cost will be $13,500 if it produces an additional snowboard. A customer is willing to pay $550 for the 241st snowboard. Should the company produce and sell it? YES/ NO Explain. please select an answer below. A) Price greater than MC B) Price less than MC C) Price equal to MC What core principles should be considered in the snowboard company's decision making? Select the one or ones that would be considered (i) Scarcity, Choice and Opportunity Cost (ii) Cost-Benefit analysis (iii) Incentive Principle (iv) Diminishing Return

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
Chapter21: Getting Employees To Work In The Firm’s Best Interests
Section: Chapter Questions
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A snowboard company currently hires 10 skilled employees who are paid a weekly wage of $1,000. The cost of capital is $3,000 and it is fixed, which means that it does not vary with output. The company is currently producing 240 snowboards. The company's cost will be $13,500 if it produces an additional snowboard. A customer is willing to pay $550 for the 241st snowboard.

Should the company produce and sell it? YES/ NO

Explain. please select an answer below.

A) Price greater than MC

B) Price less than MC

C) Price equal to MC

What core principles should be considered in the snowboard company's decision making?

Select the one or ones that would be considered

(i) Scarcity, Choice and Opportunity Cost

(ii) Cost-Benefit analysis

(iii) Incentive Principle

(iv) Diminishing Return

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