To compete in the automobile market,BMW must make many strategic decisions such as whether to introduce a new car model,whether to produce alternative-fuel vehicles,and where to advertise.At BMW's Spartanburg,South Carolina plant,managers must decide on the monthly production quantities of their X3,X5 ,and X6 models.In making this decision,the managers

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The managers at BMW's Spartanburg plant face a trade-off when deciding on the monthly production quantities of their X3, X5, and X6 models. Producing more of one model means producing less of the others, which creates a trade-off. Therefore, option B is the correct answer. Option A is incorrect because the Spartanburg plant is just one of many BMW plants, and BMW produces many car models. Option C is incorrect because the managers will not only produce the quantity of X3, X5, and X6 models where marginal cost equals zero. Finally, option D is incorrect because the production quantities cannot always be decided in which revenues are maximized without considering the production cost.

To Compete in the Automobile Market,BMW Must Make Many Strategic