A Manager Needs to Determine Whether a Product Line (Or

question 100

Multiple Choice

A manager needs to determine whether a product line (or segment) should continue or be eliminated.What kind of decision does the manager need to make?

• A)a keep-or-drop decision
• B)a make-or-buy decision
• C)a sell-or-process-further decision
• D)a special-order decision

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Definitions:

Marginal Utility

Marginal utility represents the additional satisfaction or utility a consumer gains from consuming one more unit of a good or service.

Total Utility

The sum satisfaction or benefit that a consumer receives from consuming a particular quantity of goods or services.

Consumer Surplus

The variance between the aggregate sum consumers are prepared and able to spend on a good or service versus what they truly pay.

Consumer Surplus

The divergence between the full amount consumers intend and are able to allocate for a good or service, and the amount they really pay.