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JB Company currently sells 500 units of their product for $1,000 each and generates a profit of $20,000. Its fixed costs are $80,000. Company management
JB Company currently sells 500 units of their product for $1,000 each and generates a profit of $20,000. Its fixed costs are $80,000. Company management believes they could update their equipment for an additional fixed cost of $10,000 per year, which would reduce their variable costs by $50 a unit. At what volume of production (in units) would JB Company be indifferent between the two alternatives? Your
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