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

The most attractive alternative for the bagel shop would be to lower the price of the remaining bagels, even if the price falls below $1.00 per dozen.

Step-by-step explanation:

The most attractive alternative for the bagel shop, given that it has 8 dozen bagels left at 6:30 p.m., would be to lower the price of the remaining bagels, even if the price falls below $1.00 per dozen. This is because the shop will incur a total loss if the bagels are thrown away or if fewer bagels are produced the next day. Lowering the price will increase the chances of selling the remaining bagels and reducing the losses.

Answer 2

which of the following alternatives is most attractive?

Step-by-step 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