Suppose you have a production technology that can be characterized by a learning curve. Every time...

Suppose you have a production technology that can be characterized by a learning curve.

Every time you increase production by 1 unit, your costs decrease by $6.

The first unit costs you $64 to produce.

1)You estimate you can win another project for two more units. Have your returns diminished? Why or why not?

2)If you receive a request for 4 units, what is your break-even price?

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Expert Solution

Rahul Sunny answered 1 year ago

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