Use the Information for the Question(s)below

question 88

Multiple Choice

Use the information for the question(s) below. As an oil refiner,you are able to produce $76 worth of unleaded gasoline from one barrel of Alaska North Slope (ANS) crude oil.Because of its lower sulfur content,you can produce $77 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI) crude.
-Another oil refiner is offering to trade you 10,150 Bbls of Alaska North Slope (ANS) crude oil for 10,000 Bbls of West Texas Intermediate (WTI) crude oil.Assuming you currently have 10,000 Bbls of WTI crude,the added benefit (cost) to you if you take the trade is closest to:

• A)($1400).
• B)$1400.
• C)($3908).
• D)$3908.

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Definitions:

Imitation

is the action of using someone or something as a model and attempting to replicate their success or characteristics.

Economies of Scale

Advantages in costs that companies gain by operating at larger scales, resulting in lower cost per unit as the scale expands.

Product Innovation

The process of developing new products or improving existing ones to meet changing consumer needs and preferences.

Process Innovation

The implementation of new or significantly improved production or delivery methods, enhancing efficiency or quality in the manufacturing or service sectors.