Incremental cost assocaited with producing

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Reference no: EM13144055

Consider the production cost information for Santiago's Salsa in Problem 1-1. The company is currently producing and selling 325,000 jars of sals annually. The jars sell for $5.00 each. The company i considering lowering the price to $4.60. Suppose this action will increase sales to 375,000 jars.

A. What is the incremental cost assocaited with producing an extra 50,000 jars of salsa?

B. What is the incremental revenue associated with the price reduction of $.40 per jar?

C. Should Santiago's lower the price ofits Salsa?

Reference no: EM13144055

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