A furniture workshop produces standard bookshelves and sells them to a large retailer for a set price of $120 each. The workshop's monthly rent is $2,000. The materials (wood, screws, varnish) for each bookshelf cost $85. This month, the workshop has already produced and delivered its standard order of 100 bookshelves. A local school, aware of the workshop's quality, makes a special, one-time offer to buy one additional bookshelf for $100. Assuming the workshop has the capacity to produce one more unit without incurring any extra labor or other overhead costs, what is the financially optimal decision regarding this special offer?
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Introduction to Microeconomics Course
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A furniture workshop produces standard bookshelves and sells them to a large retailer for a set price of $120 each. The workshop's monthly rent is $2,000. The materials (wood, screws, varnish) for each bookshelf cost $85. This month, the workshop has already produced and delivered its standard order of 100 bookshelves. A local school, aware of the workshop's quality, makes a special, one-time offer to buy one additional bookshelf for $100. Assuming the workshop has the capacity to produce one more unit without incurring any extra labor or other overhead costs, what is the financially optimal decision regarding this special offer?