Assume a company makes only three products, A, B, and C: Product A Product B Product C
Selling price per unit $ 80 $ 65 $ 45
Variable cost per unit $ 35 $ 26 $ 20
Machine-hours per unit 2.5 3.0 1.25
The company has only 3,000 machine-hours available and unlimited demand for each of its three products. Up to how much should the company be willing to pay per hour to lease additional machine capacity?
a. $20
b. $18
c. $16
d. $10

Brian has just finished college. he wants to set up a small business to make and sell fireworks. he registers his company and acquires a license from the government. he finds that most of his competitors are selling fireworks at an extremely low price. he would like to make more money, so he decides to innovate and develop better fireworks. he sells his fireworks at a higher price, and they are a huge hit with the customers. after a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. he even starts exporting fireworks overseas. which type of economy does this scenario describe?