A Firm Is Pondering Over the Introduction of a New

question 26

Multiple Choice

A firm is pondering over the introduction of a new good with a profit contribution of $70 per unit.Each unit of the good uses 2 units of input A and 3 units of input B.The shadow price of A is $10,and the shadow price of input B is $15.Which of the following statements is true?

• A)The firm should produce the new good.
• B)The opportunity cost of producing the new good is $75.
• C)The firm should not produce the new good.
• D)Producing the new good will earn a profit of $10.
• E)Producing the new good will earn a loss of $5.

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Definitions:

Alcohol

A psychoactive substance that can impair cognitive and physical functions, and is commonly consumed in beverages like beer, wine, and spirits.

Testosterone

A steroid hormone that plays a key role in the development of male reproductive tissues, as well as promoting secondary sexual characteristics such as increased muscle and bone mass, and the growth of body hair.

Aggressive Behavior

Actions intended to harm or injure another individual physically or psychologically.

Injections

A method of delivering medication or other substances into the body tissues, typically using a needle and syringe.