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.All else equal,if the firm continues its production in the same economic environment,the firms accounting profits should

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.All else equal,if the firm continues its production in the same economic environment,the firms accounting profits should

Quizplus · Accepted Answer

By reducing the cost per unit from $2 to $1.85, the company will be able to produce each unit at a lower cost. This means that the profit margins for each unit will be higher, leading to an increase in the overall accounting profits for the firm. Therefore, the correct choice is (A) increase.

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

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