Two car manufacturers, Saab and Volvo, have fixed costs of $1 billion and marginal costs of $10,000

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Two car manufacturers, Saab and Volvo, have fixed costs of $1 billion and marginal costs of $10,000 per car. If Saab produces 50,000 cars per year and Volvo produces 200,000, calculate the average production cost for each company. On the basis of these costs, which company’s market share do you think will grow in relative terms? (LO3)

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Principles Of Microeconomics

ISBN: 9780521775267

2nd Brief Edition

Authors: Robert Frank, Ben Bernanke

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