Finest funiture sell consumers enough furniture for a whole house in 1 single transaction. Finest thinks...
|
Finest funiture sell consumers enough furniture for a whole house in 1 single transaction. Finest thinks the company needs a larger space for storage. There are 2 possible locations. Location Y has annual fixed costs of $115,000 and variable costs of $9,000 per furniture set; location Z has annual fixed costs of $315,000 and variable costs of $5,000 per set. The sets sell for $14,000. |
| a. | at what output level would finest be indifferent between the 2 potential spots? |
| Output level | units |
| b-1. |
at what output range would Y be the prefernce? (Enter your answer as a whole number. Do not include the indifference point in your answer.) |
| Output range | 0 to |
| b-2. |
At what output range would Z be the preference? (Enter your answer as a whole number. Do not include the indifference point in your answer.) |
| Output range | or more |
Homework Answers
for indifference ;
profit for Y =profit for Z
(14000-9000)*x-115000=(14000-5000)*x-315000
4000x=20000
Output level x=50 units
b-1)
Output range =0 to 50 units
b-2) Output range =50 or more
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