Does this technology possess economies of scale

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Suppose 4 neighboring farmers want irrigation and flood control systems. Each farmer can install one system for $15,000, and is willing to do so. If 2 farmers go together they can build a joint system for $25,000, and 3 can build one system for a total of $30,000. A single system for 4 farms would be $44,000. What is the most efficient choice for all 4 farms? Does this technology possess economies of scale?

Reference no: EM131385940

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