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Pastry Paradise is looking to expand.

It decides to take over Sweet Tooth, a competitive firm. The two f...

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Pastry Paradise is looking to expand.

It decides to take over Sweet Tooth, a competitive firm.
The two firms have similar technology but different costs.
Pastry Paradise has $1500 fixed costs and $1 marginal cost per unit produced.
Sweet Tooth has $500 fixed costs but $5 marginal cost per unit produced.
What is the total cost, at the level of production where Pastry Paradise is indifferent between which technology is used?

Answer

The total cost is $1750.
The level of production is 250 units.

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Virtual Teaching Assistant: Colleen R.
Question Level: Basic
Karma: Free
Upload Date: 5/31/2017

This 71 words question was answered by Colleen R. on StudySoup on 5/31/2017. The question contains content related to Business Since its upload, it has received 305 views.

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