Firm a has overhead of 1000 a year and can produce 1000


Firm A has overhead of $1,000 a year and can produce 1,000 units at a cost of $1 per unit and units beyond that at a cost of $3 per unit. Firm B has no overhead and can produce any number of units at a cost of $2 per unit. Firm A has 3,000 customers, and firm B has 2,000 customers. Is it profitable for the two firms to merge (i.e. would their combined costs decrease)? Assume the price and overall number of customers would stay the same.

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Business Economics: Firm a has overhead of 1000 a year and can produce 1000
Reference No:- TGS01460440

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