The urban planner for Millbridge is working on a housing project. The Fixed Costs are $200,000 for the project, and Variable Costs are $250 each time a family moves into an apartment. The cost structure of the housing project would be:

The housing project now has 1,700 move-ins per year. To encourage the town to expand the program, the state offers to pay $200 for each of 500 move-ins if they expand to 2,000 per year. Should the town expand the housing project?

The average cost per move-in at 1,700 per year is $515. The average cost per move-in at 2,000 per year is $500.

What is your decision? Will you accept the offer?