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You have an opportunity to invest in a new plant. The fixed costs are $100,000 per year. The marginal cost of production is $2 for
You have an opportunity to invest in a new plant. The fixed costs are $100,000 per year. The
marginal cost of production is $2 for a quantity up to 10,000 units per year. The marginal cost of
production is $4 for a quantity between 10,001 and 30,000 units per year (an additional 20,000
units per year) and $10 for production above 30,000 per year. What is the break-even quantity if
the market is competitive, and the market price is $8 per unit? Show all calculations.
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