Question - Incremental Analysis
Consider the production cost information for Santiago's Salsa. The company is currently producing and selling 325,000 jars of salsa annually. The jars sell for $5.00 each. The company is considering lowering the price to $4.60. Suppose this action will increase sales to 375,000 jars.
What is the incremental cost associated with producing an extra 50,000 jars of salsa?