Question

4 of 9 Item 1 Willa and Westley are siblings who built a hair salon business from the ground up. They are now contemplating opening an additional salon location. The estimate to open an additional salon would mean adding $1 million in expenses and a revenue of $2 million in total over the next 5 years (all other things equal). Willa and Westley decide Item 2 to take on the new salon because the expected marginal benefit ($2 million over 5 years) is greater than the estimated marginal cost ($1 million). Item 3 Item 4 to open a second salon because the marginal cost of the new salon is low compared to other similar projects. to not open a new salon because the marginal costs proved to be too high. Item 5 Item 6

          4 of 9
Item 1
Willa and Westley are siblings who built a hair salon business from the ground up. They are now contemplating opening an
additional salon location. The estimate to open an additional salon would mean adding $1 million in expenses and a revenue of
$2 million in total over the next 5 years (all other things equal). Willa and Westley decide
Item 2
to take on the new salon because the expected marginal benefit ($2 million over 5 years) is greater than the
estimated marginal cost ($1 million).
Item 3
Item 4
to open a second salon because the marginal cost of the new salon is low compared to other similar projects.
to not open a new salon because the marginal costs proved to be too high.
Item 5
Item 6

4 of 9
Item 1
Willa and Westley are siblings who built a hair salon business from the ground up. They are now contemplating opening an
additional salon location. The estimate to open an additional salon would mean adding 1 million in expenses and a revenue of2 million in total over the next 5 years (all other things equal). Willa and Westley decide
Item 2
to take on the new salon because the expected marginal benefit (2 million over 5 years) is greater than the
estimated marginal cost (1 million).
Item 3
Item 4
to open a second salon because the marginal cost of the new salon is low compared to other similar projects.
to not open a new salon because the marginal costs proved to be too high.
Item 5
Item 6

Added by Kenneth W.

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