Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
Related questions
Question
Consider the following information about sites A, B, and C:
Site A B C
FC (annual) $100.000 $120.000 $150.000
VC (per unit) $10 $8 $7
For what range of output would you prefer site A?
Expert Solution
Step 1
Firstly let's find the indifferent points between site A and B
Total cost function of site A = Total cost function of site B
$100,000 + $10 *Q = $120,000 + $8*Q [here Q means indifference quantity]
By solving the above equation,
Q = 10000 units
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