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Economics

John Bros, owner of a spark plug manufacturing facility, is looking to expand his production capacity. He is considering three locations A, B, and C for the constructing of a new plant. The company wishes to find the most economical location for an expected volume of 2500 units per year. Bros calculates that the fixed costs per year at each of the sites amount to $25,000; $50,000; and $100,000 respectively. The variable cost is $70 per unit, $40 per unit and $20 per unit respectively. The expecting selling price for each spark plug is $120. Find the preference volume for each location.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9494375

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