A firm is deciding between two different sewing machines

Economics Oct 28, 2020

A firm is deciding between two different sewing machines. Technology A has fixed costs of $840 and marginal costs of $60 whereas Technology B has fixed costs of $540 and marginal costs of $110. At what quantity is the firm indifferent between the two technologies?

Expert Solution

Technology A;

Fixed cost= $840

Marginal cost= $60

Technology B;

Fixed cost= $540

Marginal cost= $110

So,

Quantity will be;

110Q+ 540= 60Q+ 840

50Q= 300

Q= 300/ 50

= 6

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