Problem:
A firm plans to begin production of a new small appliance. The manager has three options: Option 1: purchase the motors for the appliance from a vendor at $5 each; Option 2: produce them in house using technology A with an annual fixed cost of $78000 and a variable cost of $3 per unit; or Option 3: produce them in house using technology B with an annual fixed cost of $40000 and a variable cost of $6 per unit.
Required:
1) The range of output for which Option 1 is best is _____ units.
2) The range of output for which Option 2 is best is _____ units.
3) The range of output for which Option 3 is best is _____ units.
Solve the problem and show all work.