A New Product Should Be Introduced If Its Profit Contribution

question 38

Multiple Choice

A new product should be introduced if its profit contribution:

• A) exceeds the shadow price of each resource needed to produce it.
• B) is less than the opportunity cost of producing it.
• C) exceeds the total value of the resources used, valued at their respective shadow prices.
• D) is greater than zero.
• E) is greater than the profit contributions of the other goods produced by the firm.

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Definitions:

Soft Dry Cloth

A textile material that is both smooth to the touch and free of moisture, typically used for cleaning or drying surfaces.

Hot Water

Water at a high temperature, often used for cleaning, bathing, or as a remedy for certain ailments.

Visual Acuity

A measure of the clarity or sharpness of one’s vision, typically assessed by the ability to discern letters or numbers at a standardized distance.

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