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Production Decision Analysis
A small furniture workshop is considering whether to accept a special order to produce one additional handcrafted chair this month, which would increase its output from 10 chairs to 11 chairs. The workshop's total monthly cost (C) for producing a quantity (Q) of chairs is described by the function C(Q) = 1200 + 50Q + 5Q². The client for the special order is offering to pay $160 for the additional chair.
Based solely on an analysis of the additional cost versus the additional revenue, should the workshop produce this 11th chair? Justify your decision with a specific calculation.
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