Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Katie's Quilts is a small retailer of quilts and other bed linen products. Katie currently purchases quilts from a large producer for $150 each and

Katie's Quilts is a small retailer of quilts and other bed linen products. Katie currently purchases quilts from a large producer for

$150 each and sells them in her store at a price that does not change with the number of quilts that she sells. Katie is considering vertically integrating by making her own quilts. If the fixed cost of vertically integrating is

$10,000 and she can produce quilts at

$50 per quilt, her total cost of producing quilts, q, herself is

C=10 000+ 50Q

How many quilts does Katie need to sell for vertical integration to be a profitable decision?

For vertical integration to be profitable, Katie must sell at least _____ ? quilts.(Enter your response rounded to the nearest whole number.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Rethinking Macroeconomics

Authors: John F McDonald

2nd Edition

1000434699, 9781000434699

More Books

Students also viewed these Economics questions

Question

What position(s) do its competitors hold in the marketplace?

Answered: 1 week ago

Question

3. Keep a list of suggestions.

Answered: 1 week ago