Multiple Choice
Three processes have the following costs: Process A has a fixed cost of $2,000 and variable cost of $3.00/unit. Process B's fixed cost is $4,000 and variable cost is $2.60/unit. Process C's fixed cost is $8,000 and variable cost is $2.40/unit.
-A firm can procure gummy bags for $1.25 and sell them for $1.99. Instead of purchasing from outside, the firm could buy a gummy bag machine for $2,500 and make gummy bags for $1.00 per unit. At what point is buying the units the same as making them?
A) 5,000 units
B) 10,000 units
C) 15,000 units
D) 20,000 units
E) 25,000 units
Correct Answer:

Verified
Correct Answer:
Verified
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