A Software Firm Has Lost a Major Client and the Immediate

question 64

Multiple Choice

A software firm has lost a major client and the immediate impact is a loss of work.Software programmers are difficult to recruit and train, so the firm is considering alternatives to laying off employees.The company could consider any of the following except

• A)asking employees if they are willing to take unpaid leaves to help reduce costs.
• B)asking employees to schedule vacation during the period when there is less work.
• C)asking employees to participate in a lottery to determine who should be let go (since it is unbiased).
• D)asking employees to take a voluntary reduction in pay (or reduced hours of work).
• E)All of the above are options for the software firm.

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Definitions:

Marginal Costs

The extra expense associated with making an additional unit of a product or service.

Marginal Benefit

The additional satisfaction or utility gained from consuming one more unit of a good or service.

Marginal Benefits

The additional satisfaction or utility gained by consuming one more unit of a good or service.

Marginal Costs

A rephrased definition: The cost added by producing one additional unit of a product or service, reflecting the change in total cost that arises from an increase in production.