Suppose Dell is currently selling 250,000 laptops per month. A mgr at Dell argues, "The last 10,000 laptops we producted increased our revenue by $8.5 million. However, because we are making a substantial total profit of $25 million from producting 250,000 laptops, I think we are producting the optimal number of laptops." Briefly explain whether you agree with this mgrs reasoning.

Question

Suppose Dell is currently selling 250,000 laptops per month.  A mgr at Dell argues, "The last 10,000 laptops we producted increased our revenue by $8.5 million.  However, because we are making a substantial total profit of $25 million from producting 250,000 laptops, I think we are producting the optimal number of laptops."  Briefly explain whether you agree with this mgrs reasoning.

Jamie · Answer

I failed to say that the last 10,000 laptops increased COSTS by 8.9 million

Ms. Sue · Answer

Do you agree with the manager's reasoning?

Jamie · Answer

Yes