Scenario: a Firm Wants to Set Up a Factory

question 19

Multiple Choice

Scenario: A firm wants to set up a factory. It has four different options. The rent of the factory in each of the four different locations and the time taken to transport the product from each location to the market is shown in the table below. The opportunity cost of time is $10 per hour.

-Refer to the scenario above.What is the marginal opportunity cost of transporting products to the market if the firm chooses factory Far over factory Very Far?

• A) −$50
• B) −$100
• C) $50
• D) $150

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Definitions:

Maturity Stage

The phase in a product's lifecycle when growth slows, and the product reaches widespread acceptance and market saturation.

Chaotic

A state of complete disorder and confusion.

Personal Ethical Standards

Individual principles and values that govern behaviors and decisions, often reflecting concepts of right and wrong.

Business Ethics

The study and examination of moral and ethical principles in the business environment, focusing on the conduct of individuals and organizations.