Jack's Toys sells bicycles in a box that requires assembly. Jack will assemble the bicycle for you for a $12 fee. Jack has determined that assembling the bicycles costs $10 in labor and $4 in parts. Should Jack's Toys sell the bikes unassembled or assembled? Why?

Select one:

a. Assembled. The incremental revenue he earns exceeds the incremental costs.

b. Assembled. Even though he loses money, he, like most companies, is not concerned with losing money.

c. Unassembled. If he assembles them, he will lose money.

d. Unassembled because people should assemble their own skateboards.