Use the following setup for the next question.
A firm is deciding between two different sewing machines.Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100.
-If the company plans to produce 9 units,which technology should the firm choose?
A)Technology A
B)Technology B
C)Either technology because they are equally cost efficient
D)Need more information

Question

​Use the following setup for the next question.
A firm is deciding between two different sewing machines.Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100.
-​If the company plans to produce 9 units,which technology should the firm choose?
A)​Technology A
B)Technology B
C)Either technology because they are equally cost efficient
D)​Need more information

Quizplus · Accepted Answer

To determine which technology the firm should choose, calculate the total cost for producing 9 units with each technology. For Technology A, the total cost is $500 (fixed) + $50 (marginal) * 9 = $950. For Technology B, the total cost is $250 (fixed) + $100 (marginal) * 9 = $1150. Therefore, Technology A is the cheaper option for producing 9 units.

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Use the Following Setup for the Next Question