Business, 11.02.2020 20:23 yurimontoya759

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 $6. There are no fixed costs, and the first unit costs you $66 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 $76 $76 $76
2
3
4
5
6

Suppose you receive a request for proposal (RFP) on a project for two units.
a. Your break-even price for two units is?

Suppose that if you get the contract, you estimate that you can win another project for two more units.
b. The break-even price for those next two units alone is?

Answers: 3

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Suppose you have a production technology that can be characterized by a learning curve. Every time y...