A small machine tool producer wants to determine whether to…

Written by Anonymous on February 12, 2026 in Uncategorized with no comments.

Questions

A smаll mаchine tооl prоducer wаnts to determine whether to produce in-house or contract with a supplier. In-house production incurs fixed costs of $8,000 and variable costs of $50 per unit. The supplier has no fixed costs, only variable costs of $100 per unit. Each item is sold to the retailer at a price that averages $150.00.  At what range of output would in-house production be more profitable than contracting a supplier? (8 pts) TC = FC + v* Q      TR = R*Q    Profit = TR - TC

Comments are closed.