As a firm believer in the idea of sustainability, you were able to
discover a cheap and efficient technology of recycling plastic bottles and
single use bags into various products. To make this technology a profitable
business opportunity, your firm collaborates with Adhuna Ltd. which is in
the production of plastic helmets for construction purposes and plastic
durables for households. Given this product range, your firm has the
following two production opportunities:
● In the first case your estimated annual revenue is Rs. 2,50,000, and
the production will cost you Rs. 80,000.
● In your second option, you expect to sell 2000 helmets every year at
Rs. 100 each, and the average total cost of every helmet will be
Rs.20.
Required:
a. Which production opportunity will you choose and why?
b. If you do so, what will be your economic profit?