Ali bey has a small manufacturing firm at the Organize Sanayi. One of his customers asks him if he could make a new product, called abra-kadabra, for them. Ali bey thinks his company is capable of manufacturing abra-kadabra, but he needs to buy an abra-kadabra machine for production. He could buy the abra-kadabra machine from a US company, Expo Co. Expo Co. sells the machine for $10,000. The current exchange rate is $1 = 1,81 TL. The machine uses advanced technology and its variable cost of producing abra-kadabra is not linear, but it is a function of yearly production. If the yearly production is Q units, then the per unit variable cost is 5 - (Q / 1000) TL. Note that the variable cost is in TL, but the fixed cost is in US$.Alternatively, Ali Bey finds a local machine manufacturer, Duzgun Makina, also manufactures abra-kadabra machines. Let's call this local machine as Made-in-TR. The price of Made-in-TR is much cheaper, 10,000 TL. However, due to the technology it uses, the manucaturing cost (variable cost) of Made-in-TR is 5TL regardless of the production quantity, Q. The market price of abra-kadabra is 10 TL. (15 pt) a) What is the break-even quantity for this new product line, if Ali bey buys the machine from Expo Co.? (15 pt) b) What is the yearly production quantity, Q, at which the Ali bey is indifferent to buy the machine from Expo Co. and Duzgun Makina?

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