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(b) Referring to figure 7.3 (p. 178 in Png & Lehman), compare Boe- ing's average cost with cumulative production of 50 vis-a-vis 200 units. (Note

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(b) Referring to figure 7.3 (p. 178 in Png & Lehman), compare Boe- ing's average cost with cumulative production of 50 vis-a-vis 200 units. (Note that, in figure 7.3, the average cost is not absolute but rather indexed to 100 with production of the first unit.) (c) Suppose that the price of a Boeing 787 is $120 million and that Boeing would just break even on the costs of development ($10 bil- lion) and manufacturing with cumulative production of 200 units. How much would Boeing lose with cumulative production of 50 units? 150 Figure 7.3 Unit (Average) Cost 100 Unit Average Cont Cumulative Production Run 50 100 150 300

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