Question

  

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 $80000 and a variable cost of $4 per unit; or

Option 3: produce them in house using technology B with an annual fixed cost of $190000 and a variable cost of $2 per unit.

The range of output for which Option 1 is best is

0-63333

units.

The range of output for which Option 2 is best is

-63334

units.

The range of output for which Option 3 is best is

units.

FORMAT TO ENTER VALUES:

- Round to the nearest integer, no decimals

- Enter the range as ####-####, for example: 47500-92000.

- If an option is outperformed by other option(s), enter NEVER (all capital)

- For an open ended range use INFINITY (all capital), for example: 47500-INFINITY

- If an option is good only at one point, just enter the value of the output, for example 8750

- DO NOT USE parentheses, spaces or commas!