A New Product Should Be Introduced If Its Profit Contribution

question 38

Multiple Choice

A new product should be introduced if its profit contribution:

• A) exceeds the shadow price of each resource needed to produce it.
• B) is less than the opportunity cost of producing it.
• C) exceeds the total value of the resources used, valued at their respective shadow prices.
• D) is greater than zero.
• E) is greater than the profit contributions of the other goods produced by the firm.

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Definitions:

Functionally Autonomous

A term by psychologist Gordon Allport referring to motives or behaviors that continue independently even after the original reasons for them have changed.

Reflexes

Involuntary and automatic responses of the body to certain stimuli, serving as basic survival mechanisms.

Fixations

Persistent focuses or attachments to behaviors, concepts, or stages of development that were significant in early childhood, possibly leading to psychological issues.

Propriate Motives

Motivations that are integral to an individual's self-concept and are related to the goals of maintaining self-identity and personal significance.