A Firm Is Pondering the Introduction of a New Good

Multiple Choice

A firm is pondering the introduction of a new good with a profit contribution of $70 per unit. Each unit of the good uses 2 units of input A and 3 units of input B. The shadow price of A is $10, and the shadow price of input B is $15. Which of the following statements is true?

A) The firm should produce the new good.
B) The opportunity cost of producing the new good is $75.
C) The firm should not produce the new good.
D) Producing the new good will earn a profit of $10.
E) Producing the new good will earn a loss of $5.