Suppose you have a production technology that can be characterized by a learning curve. Every time you
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Question:
Suppose you have a production technology that can be characterized by a learning curve. Every time you increase production by one unit, your marginal cost decreases by $8. There are no fixed costs, and the first unit costs you $64 to produce.
Use the given information to fill in the marginal cost of each unit, as well as the total cost and average cost of each level of output.
Quantity(units)Marginal Cost($)Total Cost ($)Average Cost ($/Unit)
1 $64 $64$64
2
3
4
5
6
Suppose you receive a request for proposal (RFP) on a project for three units.
Your break-even price for three units is
Suppose that if you get the contract, you estimate that you can win another project for two more units.
The break-even price for those next two units alone is
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