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Q. A brewery is considering two potential production investments:
Option A costs an initial $2 million as well as will involve constant marginal cost of $5
Option B costs an initial $4 million as well as will involve constant marginal cost of $3
In order to make the computation simple, presume that the annual capital cost is 10% of the total outlay. At which production quantity every year would the brewery be indifferent between these two investment opportunities?
describe whether that combination leads to more or less growth over the next period.
q.based on the production function parametera. which industry or industries appears to exhibit decreasing returns to
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