A Manufacturing Firm Is Considering Two Locations for a Plant

question 5

Multiple Choice

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows

What would be the total annual costs at the point of indifference?

• A)$300,000
• B)$240,000
• C)$380,000
• D)$220,000
• E)$760,000

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Definitions:

Weather Forecasts

Predictions about future weather conditions based on atmospheric observations and models.

Forecast Accuracy

The measure of how closely forecasted values match the actual or observed values in a specific period.

Rain

Precipitation in the form of liquid water drops that fall from clouds and have a diameter of at least 0.5 millimeters.

No Rain

A weather condition indicating the absence of precipitation.