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Use the Following Information to Answer Questions 33 - 35

Question 7

Multiple Choice

Use the following information to answer Questions 33 - 35
Sarah's Machinery Company is deciding to dump their current technology A for a new technology B with small fixed costs but big marginal costs.The current technology has fixed costs of $500 and marginal costs of $50 whereas the new technology has fixed costs of $250 and marginal costs of $100.
-If the company plans to produce 9 machines,which technology should the firm choose?


A) The low-marginal-cost technology
B) The high-marginal-cost technology
C) Either technology because they are equally cost efficient
D) Need more information

Correct Answer:

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