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ECO - A firm can choose between two production technologies

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Question;A firm can choose between two production technologies for a new product line. If it installs technology 1, its yearly costs will be C1(q) = 3600 + 65q + 36q2. If it installs technology 2, they will be C2(q) = 900 + 900q + q2.a. What is the minimum efficient scale for each technology?b. Which would the firm prefer (purely from a cost standpoint) if it expected to sell 30 units in summer and 10 units in winter each year?c. What if it were more optimistic about summer sales?

 

Paper#56342 | Written in 18-Jul-2015

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