A Firm Practices the Pure Chase Strategy

Multiple Choice

A firm practices the pure chase strategy. Production last quarter was 1000. Demand over the next four quarters is estimated to be 900, 700, 1000, and 1000. Hiring cost is $20 per unit, and firing cost is $5 per unit. Over the next year, the sum of hiring and layoff costs will be

A) $500
B) $2,500
C) $7,500
D) $7,000
E) $12,500