Managerial Economics & Business Strategy 7th Edition by Michael Baye, Stanley Brue, David MacPherson

Exercise 5

Identify the type of specialized investment that each of the following situations requires.
a. You hire an employee to operate a machine that only your company uses.
b. An aerosol canning company designs a filling line that can be used only for a particular firm's product.
c. A company builds a manufacturing facility across the street from its primary buyer.