Answer:
The correct answer is A.
Explanation:
Giving the following information:
Special-Purpose Equipment:
Fixed costs= $200,000 per year
Unitary variable cost= $15 per unit
General-Purpose Equipment:
Fixed costs= $50,000 per year
Unitary variable cost= $20 per unit
We need to find the cost function:
Special-Purpose= 200,000 + 15*q
General-Purpose= 50,000 + 20*q
200,000 + 15q = 50,000 + 20q
150,000=5q
30,000 = q
30,000 units is the indifference point. From 30,000 units Special-Purpose is cheaper.
