A Company Is Deciding Where to Assign Its Summer Intern

question 89

Essay

A company is deciding where to assign its summer intern. The manager estimates that the intern can save $10,000 in the supply chain or increase sales (revenue) by $20,000. Given the following table, where should the manager assign the intern to maximize profits?

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Definitions:

Government Regulates

The process by which governments impose rules and directives to govern the operation of markets and industries, often to protect consumers and maintain fair competition.

Barrier To Entry

Barriers to entry are obstacles or impediments that make it difficult for new entrants to enter a particular market, such as high start-up costs, strict regulations, or strong brand loyalty among consumers.

Economies Of Scale

Economies of scale are cost advantages reaped by companies when production becomes efficient, as the cost per unit of output decreases with the increase in scale of operation.

Natural Monopoly

An industry that realizes such large economies of scale that single-firm production of that good or service is most efficient.