Hello Syed,
You have to be careful, some questions look very easy to answer directly (By mind) without doing a simple calculation.
Suppose each set of product need (1) worker to produce:
Choice 1: (33 sets x $20) - (6 workers x $20) = $660 - $120 = $540 (Marginal profit)
Choice 2: (36 sets x $20) - (8 workers x $20) = $720 - $160 =
$560 Choice 3: (36 sets x $20) - (9 workers x $20) = $720 - $180 = $540
So, the correct answer is
(8) workers
Another way to visually predict the answer: The difference between options 1 & 2 (Cost vs Revenue)
8 - 6 = 2 workers (Additional cost of $40) ... and ... 36 - 33 = 3 sets (Additional revenue of $60), so option (2) has extra $20 profit margin.
Wish you good luck, success, safe & healthy condition
Kind regards
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Samer Ahmad, FMVA, SCA
Kuwait
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Original Message:
Sent: 03-27-2020 04:42 AM
From: Syed Yousuf Jamal
Subject: Marginal Analysis
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