Answer
The consultant is assuming there is a marginal cost that will be saved if less product is produced.
Work Step by Step
The marginal cost of goods not produced represents a cost savings to the company.
Microeconomics: Principles, Applications, and Tools (8th Edition)
by O'Sullivan, Arthur; Sheffrin, Steven; Perez, Stephen
Published by
Prentice Hall
ISBN 10:
0-13294-886-9
ISBN 13:
978-0-13294-886-9
Chapter 5 - Elasticity: A Measure of Responsiveness - Exercises - 5.3 Elasticity and Total Revenue for a Linear Demand Curve - Page 123: 3.8b
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