Drummer produces two products, A and B. The following information is available for these two products:

-If only 5,000 units of each product, A and B can be sold, it would be best to
A) discontinue A as it results in a net loss of $2.00 per unit, and continue producing B.
B) produce only 2,500 units of A and 5,000 units of B to maximize profits.
C) produce 5,000 units of both A and B.
D) discontinue the production of both A and B.

Question

Drummer produces two products, A and B. The following information is available for these two products:
 
-If only 5,000 units of each product, A and B can be sold, it would be best to
A) discontinue A as it results in a net loss of $2.00 per unit, and continue producing B. 
B) produce only 2,500 units of A and 5,000 units of B to maximize profits. 
C) produce 5,000 units of both A and B. 
D) discontinue the production of both A and B.

Quizplus · Accepted Answer

The Answer of Drummer produces two products, A and B. The following information is available for these two products:
 
-If only 5,000 units of each product, A and B can be sold, it would be best to
A) discontinue A as it results in a net loss of $2.00 per unit, and continue producing B. 
B) produce only 2,500 units of A and 5,000 units of B to maximize profits. 
C) produce 5,000 units of both A and B. 
D) discontinue the production of both A and B.

Drummer Produces Two Products, a and B