Understanding Extent and Investment Decisions

Foundations of Economics - Costs and Decisions
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Foundations of Economics - Costs and Decisions
Extent decisions are focused on the quantity of time that a company needs to produce at a given time. The break-even decisions focus on the number of products that a company needs to sell to ensure that it makes profits (Sintha, 2020). Therefore, pricing and production decisions are considered to extend decisions because they consider the level of demand in the market. Therefore, the decisions made should meet the level of demand but not focus on the amount that needs to be sold to make profits. Demand plays a vital role in determining a company's prices and production levels. If the demand is low, the company has to produce fewer products to avoid wastage. It might also be required to change its prices to suit ...