Assume that you are contemplating entering the dry dog food industry, which sells 2.4 billion pounds of food per year.

You know that the industry exhibits economies of scale and that the cost to build a plant a fully automated at minimum efficient scale is $300 million ($30 million annually). This plant can produce 72 million pounds of dog food per year, which represents a 3% market share (72 million / 2.4 billion pounds) for the industry.

is the cost per pound if the plant is producing at full capacity? (remember to look at plant cost for just one year

if the new firm does not reach 3% market share? If your company only reaches a 1.0% market share, what does that do to the cost per pound

what might you give leadership if you thought that the company could not reach 3% market share? Are there other production strategies to be competitive at lower production levels