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A firm is about to undertake the manufacturing of a product, and it is weighing the process configuration options. There are two intermittent processes under
A firm is about to undertake the manufacturing of a product, and it is weighing the process configuration options. There are two intermittent processes under consideration, as well as a repetitive focus. The smaller intermittent process has fixed costs of $ per month and variable costs of $ per unit. The larger intermittent process has fixed costs of $ per month and variable costs of $ per unit. A repetitive focus plant has fixed costs of $ per month and variable costs of $ per unit.
a At what output does the large intermittent process become cheaper than the small one?
b At what output does the repetitive process become cheaper than the larger intermittent process?
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