Harry Hoarder runs a small street vendor service which contracts to produce and sell moulded plastic souvenirs (key chains, commemorative plastic coins, plastic animals, etc.) at small theatre shows.As owner of the firm, Harry must decide how much of each product to produce.The key element of this decision is:

Question

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The key element of Harry's decision is how costs will vary as he changes the level of production. This is because Harry wants to maximize his profits, and the costs of producing each item will change as he produces more or less of them. By understanding how costs will vary at different levels of production, Harry can make an informed decision about how much of each product to produce in order to maximize his profits. The other options (A, B, and D) may also be important factors to consider, but they are not as critical to the decision-making process as understanding how costs will vary with changes in production levels.

Harry Hoarder Runs a Small Street Vendor Service Which Contracts