A production order for 200 units is recieved. The item is made on a machine that has a $20 set-up, an output of six items per hour, and a daily fixed cost of $100. The variable item cost is $1.00. What is the highest price the cmpany could afford to buy the item for, instead of producing the item itself?

A production order for 200 units is recieved. The item is made on a machine that has a $20 set-up, an output of six items per hour, and a daily fixed cost of $100. The variable item cost is $1.00. What is the highest price the cmpany could afford to buy the item for, instead of producing the item itself?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 13SQ

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