The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per-unit variable cost would be $3. If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year, respectively, and she expects to be 80 percent efficient in her use of this land, how many rosebushes does Rose plan to grow each year on this land?
A)1,600
B)2,400
C)3,000
D)2,000
E)1,000

Question

Quizplus · Accepted Answer

The expected number of rosebushes Rose plans to grow each year is calculated based on the effective capacity and the efficiency. The effective capacity is 2,000 rosebushes per year, and with an 80 percent efficiency, the calculation is 2,000 * 0.80 = 1,600 rosebushes per year.

The Owner of a Greenhouse and Nursery Is Considering Whether