A manager invests $400,000 in a technology that should reduce the overall costs of production.The company managed to reduce their cost per unit from $2 to $1.85.This affects

Question

​A manager invests $400,000 in a technology that should reduce the overall costs of production.The company managed to reduce their cost per unit from $2 to $1.85.This affects

Quizplus · Accepted Answer

The technology investment will affect both economic and accounting profits. Economic profit will increase because the cost of production has decreased, assuming all other costs remain the same. Accounting profit will also increase because the cost per unit has decreased, resulting in higher profit margins.

​A Manager Invests $400,000 in a Technology That Should Reduce

A Manager Invests $400,000 in a Technology That Should Reduce