economics question

Anonymous
timer Asked: Nov 16th, 2015

Question description

A manufacturing company is considering two potential investments:


Option 1 costs an initial $2,000,000 and will involve constant marginal cost of five dollars per unit.


Option 2 costs an initial $4,000,000 and will involve constant marginal cost of three dollars per unit


If the annual capital cost is 10% of the total investment, at what production quantity per year would the company be indifferent between these two investment opportunities?


Tutor Answer

(Top Tutor) Studypool Tutor
School: Carnegie Mellon University
Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors