The maximum outsourcing price a company is willing to pay can be found by solving for the company's indifference point.

Question

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The indifference point is the point where the cost of outsourcing is equal to the cost of performing the task in-house. Therefore, the maximum outsourcing price a company is willing to pay can be determined by finding this indifference point. If the cost of outsourcing exceeds this point, the company would prefer to perform the task in-house.

The Maximum Outsourcing Price a Company Is Willing to Pay