Question

A bagel shop sells fresh baked bagels from 5 a.m. until 7 p.m. every day. The shop does not sell day-old bagels, so all unsold bagels are thrown away at 7 p.m. each day. The cost of making and selling a dozen bagels is $1.00; there are no costs associated with throwing bagels away. If the manager has 8 dozen bagels left at 6:30 p.m. on a particular day, which of the following alternatives is most attractive?
A. Lower the price of the remaining bagels, even if the price falls below $1.00 per dozen.
B. Lower the price of the remaining bagels, but under no circumstances should the price fall below $1.00 per dozen.
C. Throw the bagels away and produce 8 fewer dozen bagels tomorrow.
D. Starting tomorrow, lower the price on all bagels so they will all be sold earlier in the day.

Answer 1

Answer:

which of the following alternatives is most attractive?

Explanation:

Lower the price of the remaining bagels, even if the price falls below $1.00 per dozen.

It can be the improvement in order to recover the bagels cost without having to throw them away