1Cademy - A company produces widgets, and the cost to manufacture each individual widget is always £60. A manager is presented with a one-time opportunity to sell 100 widgets to a new client for £65 each. The manager rejects the offer, stating, "Last year, our total average cost per widget, when including all factory and administrative expenses, was £70. We cannot sell for £65 and make a profit." Which of the following statements provides the most accurate economic critique of the manager's decision and reasoning?

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Activity: Evaluating Statements for a Firm with a Unit Cost of £60

A company produces widgets, and the cost to manufacture each individual widget is always £60. A manager is presented with a one-time opportunity to sell 100 widgets to a new client for £65 each. The manager rejects the offer, stating, "Last year, our total average cost per widget, when including all factory and administrative expenses, was £70. We cannot sell for £65 and make a profit." Which of the following statements provides the most accurate economic critique of the manager's decision and reasoning?

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A firm manufactures a product where the cost to produce each individual unit is £60. This per-unit cost remains the same no matter how many units are made. Based only on this cost information, evaluate the following statements. Which statement represents the most sound economic decision for the firm regarding a new sales order?
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A company produces widgets, and the cost to manufacture each individual widget is always £60. A manager is presented with a one-time opportunity to sell 100 widgets to a new client for £65 each. The manager rejects the offer, stating, "Last year, our total average cost per widget, when including all factory and administrative expenses, was £70. We cannot sell for £65 and make a profit." Which of the following statements provides the most accurate economic critique of the manager's decision and reasoning?