Incremental cost associated with producing

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Reference no: EM13259220

Consider the production cost information for Santiago's Salsa in problem 1. The company is currently producing and selling 250,00 jars annually. The jars sell for $4.00 each. The company is considering lowering the price to $3.70. Suppose this action will increase sales to 300,000 jars.

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

B. What is the incremental cost associated with the price reduction of $0.30 per jar?

C. Should Santiago's lower the price of it's salsa?

Reference no: EM13259220

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