When making product mix decisions, companies are most profitable when they maximize production of the product with the greatest sales price.

Question

Quizplus · Accepted Answer

When making product mix decisions, companies should consider various factors beyond simply maximizing the sales price. These factors may include production costs, market demand, competition, and profitability margins. A company may have a high-sales-price product, but if it has relatively low profit margins compared to other products or if there is low market demand, then it may not be the most profitable option. Companies should also consider the overall balance and diversity of their product mix to ensure long-term success.

When Making Product Mix Decisions, Companies Are Most Profitable When