Use the following information to answer Questions 33 - 35
Sarah's Machinery Company is deciding to dump their current technology A for a new technology B with small fixed costs but big marginal costs.The current technology has fixed costs of $500 and marginal costs of $50 whereas the new technology has fixed costs of $250 and marginal costs of $100.
-At what quantity is Sarah Machinery indifferent between two technologies?
A)5
B)6
C)7
D)8

Question

Quizplus · Accepted Answer

To find the quantity where Sarah's Machinery is indifferent between the two technologies, set the total costs equal: $500 + $50Q = $250 + $100Q. Solving for Q gives Q = 5.

Use the Following Information to Answer Questions 33 - 35