Post Utme Bsu 2024 Commerce Question 29

A firm is considering two different production strategies for its new product. Strategy A involves a high level of automation, while Strategy B involves a low level of automation. The firm's production manager estimates that Strategy A will result in a 20% increase in productivity, while Strategy B will result in a 10% increase in productivity. However, Strategy A will also result in a 5% increase in costs, while Strategy B will result in a 2% increase in costs. What is the net benefit of Strategy A compared to Strategy B?