# ECONOMICS

Imagine that you manage a company that has invested \$5 million in developing a new product, but has not completed development. At the last meeting, your salespeople report that the arrival of new competing products has reduced expected sales of your new product to \$3 million. If it would cost \$1 million to finish development and make the product, should you do so? What is the most you should pay to complete development? Why? Be sure to explain.

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