Uni-Go Company makes motorized unicycles. Uni-Go is deciding whether to include a safety feature that would cost $6 for each unicycle. Uni-Go estimates the probability of death without the safety feature is 1/90,000 and the death cost per unicycle is $5.55. Uni-Go's cost-benefit recommendation is to
A) add the safety device.
B) not add the safety device.
C) add the safety device plus additional safety devices.
D) not produce the unicycle.

Question

Quizplus · Accepted Answer

The cost of adding the safety feature ($6) is higher than the estimated death cost per unicycle ($5.55), making it economically more viable to not add the safety feature based on a cost-benefit analysis.

Uni-Go Company Makes Motorized Unicycles