If it costs View Your World, a high- end window manufacturer, $26 per window to install a higher quality glass in its windows and consumers will pay an additional $15 per window for the improvement, which of the following is true?
A)View Your World should install the higher quality glass because the marginal revenue from the quality enhancement exceeds the marginal cost.
B)View Your World should install the higher quality glass because the marginal revenue from the quality enhancement is less than the marginal cost.
C)View Your World should not install the higher quality glass because the marginal revenue from the quality enhancement is less than the marginal cost.
D)View Your World should not install the higher quality glass because the marginal revenue from the quality enhancement exceeds the marginal cost.

Question

Quizplus · Accepted Answer

The marginal cost of installing the higher quality glass is $26, but the additional revenue View Your World can generate from this improvement is only $15. Therefore, the marginal revenue ($15) is less than the marginal cost ($26), making option C correct.

If It Costs View Your World, a High- End Window