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QUESTION 3 XYZ is a small rm producing buttons. It is seeking prot maximization. At the prevailing market price, say RM 12 per box it

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QUESTION 3 XYZ is a small rm producing buttons. It is seeking prot maximization. At the prevailing market price, say RM 12 per box it can sell as many buttons as it produces. It has, however, a limited capacity of a single manufacturing plant. It is operating at ll] capacity on all working days, expect Sundays. if it has to work on Sunday, the rm has to pay overtime (double) wage rates to the workers. As such, the marginal costs of production on weekdays remain constant, but tend to be higher on Sundays. Suppose, the rm gets a contract from 'Big Boss' garment producing rm to supply the buttons with its brand name and ready to pay RM18 per box for weekly order of 1000 boxes. The rm's full capacity daily output is 1000 boxes, which it can sell at RMIZ per box in the market. The rm's weekly xed costs amount to RM1000 (rent + interest + insurance). Variable costs is RMIO per box (raw materials RMS + labour cost RMS). Assuming no cost difference between ordinary and brand name imposed buttons: Examine the output determination by the rm and justify whether it should produce more by working on Sundays. (20 marks) [Tots]: 20 MARKS] Note: Students are required tojustil their answer based on the table developed by them

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