If a firm is not directly paying all of the transportation costs, managers still have an incentive to minimize the sum of the production and transportation costs.

Question

Quizplus · Accepted Answer

Even if transportation costs are not directly paid by the firm, they can still affect the total cost of production and impact profits. Therefore, managers have an incentive to minimize the total cost by considering both production and transportation costs.

If a Firm Is Not Directly Paying All of the Transportation