A Firm Is About to Undertake the Manufacture of a Product,and

question 55

Essay

A firm is about to undertake the manufacture of a product,and it is weighing the process configuration options.There are two intermittent processes under consideration,as well as a repetitive focus.The smaller intermittent process has fixed costs of $3,000 per month and variable costs of $10 per unit.The larger intermittent process has fixed costs of $12,000 per month and variable costs of $2 per unit.A repetitive focus plant has fixed costs of $50,000 per month and variable costs of $1 per unit.
a.At what output does the large intermittent process become cheaper than the small one?
b.At what output does the repetitive process become cheaper than the larger intermittent process?

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Definitions:

Competition

The rivalry among businesses or individuals for resources, customers, market share, or achievement, which can drive innovation and efficiency.

Disadvantaged

Individuals or groups that experience a lack of resources, opportunities, or privileges, putting them at a social, economic, or educational disadvantage.

Advantaged

Having favorable conditions or circumstances that provide a superior position or greater opportunities compared to others.

Society

A group of individuals involving persistent social interactions, or a large social grouping sharing the same geographical or social territory.