Brewery be indifferent between two investment opportunities, Microeconomics

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Brewery be indifferent between two investment opportunities

A brewery is considering two potential production investments:

Option A costs an initial $2 million and will involve constant marginal cost of $5
Option B costs an initial $4 million and will involve constant marginal cost of $3

In order to make the calculations simple, assume that the annual capital cost is 10% of the total investment. At what production quantity per year would the brewery be indifferent between these two investment opportunities?

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Microeconomics: Brewery be indifferent between two investment opportunities

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Microeconomics: Brewery be indifferent between two investment opportunities

Reference No:- TGS046854

Have a Question? (oR Write a Review)

Recent Questions Asked Microeconomics

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Ask an Expert for Answer!!

Microeconomics: Brewery be indifferent between two investment opportunities

Reference No:- TGS046854

Recent Questions Asked Microeconomics

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