Question

A manager is building a simulation model to project future profits. She believes that the future revenue will be either

$12 or $25 per hour.

Answer 1

A manager building a simulation model to project future profits is analyzing potential revenue scenarios of $12 or $25 per hour. The different revenue projections will affect the budget constraint and, consequently, the decisions about how many hours Vivian will choose to work.

Step-by-step explanation:

This question falls under the subject of Business and is suitable for High School level students.

A manager building a simulation model to project future profits is analyzing potential revenue scenarios of $12 or $25 per hour. The different revenue projections will affect the budget constraint and, consequently, the decisions about how many hours Vivian will choose to work.

A higher wage, such as $12/hour in this case, would result in a new budget constraint that tilts up more steeply. This change could lead Vivian to work more hours as the additional wage would incentivize her to increase her earnings.