Costs of Regulation. Biosystems Technology, Inc., manufacturers equipment used by the biotechnology industry in the analysis of protein and DNA. Market demand and marginal revenue relations for the Biosystems units are:

Suppose the Occupational Health and Safety Administration (OSHA) has recently ruled that Biosystems must install expensive new shielding equipment to further guard against worker injuries. This will increase the $10,000 marginal cost of manufacturing by $15,000 per unit. Biosystems' fixed expenses of $15 million per year, which include a required return on investment, will be unaffected.

Question

Costs of Regulation. Biosystems Technology, Inc., manufacturers equipment used by the biotechnology industry in the analysis of protein and DNA. Market demand and marginal revenue relations for the Biosystems units are:
 
 Suppose the Occupational Health and Safety Administration (OSHA) has recently ruled that Biosystems must install expensive new shielding equipment to further guard against worker injuries. This will increase the $10,000 marginal cost of manufacturing by $15,000 per unit. Biosystems' fixed expenses of $15 million per year, which include a required return on investment, will be unaffected.

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The Answer of Costs of Regulation. Biosystems Technology, Inc., manufacturers equipment used by the biotechnology industry in the analysis of protein and DNA. Market demand and marginal revenue relations for the Biosystems units are:
 
 Suppose the Occupational Health and Safety Administration (OSHA) has recently ruled that Biosystems must install expensive new shielding equipment to further guard against worker injuries. This will increase the $10,000 marginal cost of manufacturing by $15,000 per unit. Biosystems' fixed expenses of $15 million per year, which include a required return on investment, will be unaffected.