Karla's Candle Factory Is Considering Two Different Machines

question 94

Essay

Karla's candle factory is considering two different machines. Machine A is highly automated with FC of $25,000 and VC of $.1/candle. Machine B is actually no machine but rather hand labor with FC of $10,000 and VC of $.5/candle. If demand for Karla's candles is 25,000, which machine should she pick?

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Definitions:

Door-In-The-Face

A technique in persuasion that involves making a large request that is likely to be refused in order to increase the chances that a person will agree to a smaller request later.

Lowballing

A strategy where an initially favorable offer is made, only to have the terms made less favorable after acceptance.

Obedience

When a person follows the orders of a person in authority.

Conformity

The altering of your own behaviors and opinions to match those of other people or to match other people’s expectations.