Mask King is a producer of disposable face masks in Country Z. She is deciding whether to upgrade the quality of her face masks from Level I to Level III by using nano-technology she has been researching on since the last few years. When considering the upgrade of the product quality, the main relevant information are given as follows: i. Mask King paid $2 million for the research cost used in the relevant nanotechnology in the past few years; ii. A new production line has to be established, including the purchase of new tools and equipment, which estimated to be cost $5 million; iii. An increase in income of $6 million is expected from selling the upgraded Level III face masks. Using the concept of opportunity cost, explain whether Mask King should upgrade her face mask
Mask King is a producer of disposable face masks in Country Z. She is deciding whether to upgrade the quality of her face masks from Level I to Level III by using nano-technology she has been researching on since the last few years.
When considering the upgrade of the product quality, the main relevant information are given as follows:
i. Mask King paid $2 million for the research cost used in the relevant nanotechnology in the past few years;
ii. A new production line has to be established, including the purchase of new tools and equipment, which estimated to be cost $5 million;
iii. An increase in income of $6 million is expected from selling the upgraded Level III face masks.
Using the concept of
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