Learning Curves: Suppose you have a production technology that can be characterized by a learning curve. Every time you increase production by one unit, your costs decrease by $6. The first unit cost you $64 to produce.
If you receive a request for proposal (RFP) on a project for 4 units, what is your break-even price.?
Suppose that if you get the contract, you estimate that you can win another project for two more units. Now what is your break-even price for those two units?