The company that you manage has already spent $5 million on developing a new product-a website that combines You Tube, Twitter, and Facebook - called You Twit Face. The development is not quite finished. It will cost an extra $6 million to finish development and complete the product. Assume that this $6 million amount includes the explicit costs and any opportunity cost that the company may have. At a recent meeting, your salespeople report that the expected sales of your new product (if you finish) are $10 million total. If you do not finish developing the product you can sell the incomplete product to another company for $3 million. What is the MC of finishing the development? What is the MB of finishing the development? Should you finish the product? Why or why not? Use the idea of "thinking at the margin" to explain your answer. Thank u 2. The company that you manage has already spent $5 million on developing a new product - awebsite that combines You Tube, Twitter, and Facebook - called You Twit Face. Thedevelopment is not quite finished. It will cost an extra $6 million to finish development andcomplete the product. Assume that this $6 million amount includes the explicit costs and anyopportunity cost that the company may have. At a recent meeting, your salespeople report thatthe expected sales of your new product (if you finish) are $10 million total. If you do not finishdeveloping the product you can sell the incomplete product to another company for $3 million.What is the MC of finishing the development?What is the MB of finishing the development?Should you finish the product? Why or why not? Use the idea of "thinking at the margin" toexplain your answer.

Marginal benefit measures the additional benefit associated with doing an additional unit of…

Answered: The company that you manage has already…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 5MC

See similar textbooks

Related questions

Question

The company that you manage has already spent $5 million on developing a new product-a website that combines You Tube, Twitter, and Facebook - called You Twit Face. The development is not quite finished. It will cost an extra $6 million to finish development and complete the product. Assume that this $6 million amount includes the explicit costs and any opportunity cost that the company may have. At a recent meeting, your salespeople report that the expected sales of your new product (if you finish) are $10 million total. If you do not finish developing the product you can sell the incomplete product to another company for $3 million. What is the MC of finishing the development?

What is the MB of finishing the development?

Should you finish the product? Why or why not? Use the idea of "thinking at the margin" to explain your answer.

Thank u

2. The company that you manage has already spent $5 million on developing a new product - a
website that combines You Tube, Twitter, and Facebook - called You Twit Face. The
development is not quite finished. It will cost an extra $6 million to finish development and
complete the product. Assume that this $6 million amount includes the explicit costs and any
opportunity cost that the company may have. At a recent meeting, your salespeople report that
the expected sales of your new product (if you finish) are $10 million total. If you do not finish
developing the product you can sell the incomplete product to another company for $3 million.
What is the MC of finishing the development?
What is the MB of finishing the development?
Should you finish the product? Why or why not? Use the idea of "thinking at the margin" to
explain your answer.

Expert Solution

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions