Answer: Option A
Explanation:
From the question, the demand given is 250,000
For Option A,
Fixed cost = $25000
Variable cost = $0.1 per candle
Total cost = Fixed cost + Variable cost
Total cost = $25000 + ($0.1 × 250,000)
= $25,000 + $25,000
= $50,000
For Option B,
Fixed cost = $10000,
Variable cost = $0.5 per candle
Total cost = Fixed cost + Variable cost
Total cost = $10000 + ($0.5 × 250,000)
= $10,000 + $125,000
= $135,000
Therefore, the board should select option A as the total cost is cheaper than option B.
The marginal benefit that gained by reducing pollution should be more than marginal cost used to reduce pollution.
Explanation:
In order to reduce the net cost for pollution reduction the marginal benefit should be more than marginal cost. If the marginal benefit is more than marginal cost then it will be good for the society . Marginal benefit reduces when there is increase in consumption , when the marginal cost is more than marginal benefit which means by consuming one extra unit the consumer is not getting the satisfaction.
Answer:
derived demand
Explanation:
Company X sells their products exclusively to companies in the Y market. In estimating demand from their business customers, Company X must understand that this demand is actually <u>derived demand</u>, which means that the demand for industrial products and services is driven by demand for consumer products and services.
