A manager in charge of new product development can hire engineers and market researchers. The annual salary of an engineer is $40,000 while a market researcher receives $20,000. The marginal contribution of engineers and market researchers are:
Based on the above information, how should a manager with an annual budget of $240,000, allocate this budget in order to maximize the number of new products developed?
A. Hire three engineers and five market researchers.
B. Hire four engineers and four market researchers.
C. Hire five engineers and two market researchers.
D. Hire three engineers and four market researchers.
Answer: B
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Marginal product equals 0 when:
A) average product equals zero. B) total product equals average product. C) average product reached its minimum value. D) total product reaches its maximum value.
A characteristic of outsourcing is
a. completely unrelated to vertical integration b. likely to be profitable exactly when vertical integration is profitable c. it prevents a firm from focusing on its core competencies d. can allow for the exploitation of differing degrees of economies of scale at different points in the supply chain
If a monopoly wishes to sell more output, it must:
A. find a more cost effective way to produce its goods. B. lower the price. C. be in the economies of scale range of its ATC. D. eliminate its existing competition.
In the debate between the critics and defenders of advertising, what conclusion have policymakers come to regarding the effect of advertising on competition - advertising makes markets more competitive or less competitive?