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Bogdan [553]
3 years ago
15

You are a financial manager in a public corporation. One of your engineers says that they can increase the profit margin on your

flagship product by using a lower quality vendor.​ However, the product is likely to fail more often and will generally not last as long. Will taking your​ engineer's suggestion necessarily make shareholders better​ off? Why or why​ not?
Business
1 answer:
Anni [7]3 years ago
7 0

Answer:

No, the particular suggestion never makes shareholders better off.

Explanation:

No, it isn't necessarily going to make investors better off.

Although we are cutting costs, that could boost earnings in the short term, we will deal with much more expensive permit problems and lost public image with our customers, possibly leading them to purchase from our rivals, that in the longer term would decrease cash flow.

  • Having a commodity less expensive but of lesser quality is not the same as increasing the value of the shares.

therefore, we have to reject this offer.

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A general decrease in wages will result primarily in the aggregrate demand curve shifting to the shifting to the right.

<h3>What is the impact in the decrease in wages? </h3>

When there is a decrease in wages, it becomes cheaper to hire labor. As a result, there would be an increase in the demand for labor. This would shift the demand curve for labor to the right.  

The decrease in wages, would shift the long run aggregrate supply curve to the left.

To learn more about the demand curve, please check: brainly.com/question/25140811

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Answer:

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Explanation:

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