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

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?