Suppose LMC manufactures Wild Hyacinth-perfume

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Suppose a LMC manufactures Wild Hyacinth, a perfume, which sells them for $50. The annual costs incurred in the production and sale of Wild Hyacinth are $200,000. Each bottle of Wild Hyacinth requires $10 in materials, labor, and energy.

Consider the previous problem. Another company, TTS, has offered to produce Wild Hyacinth for LMC for $22 a bottle.

At which quantity is it more economical for LMC to make versus buy?

Given the LMC’s desire to make $100,000 in profit annually, should they make or buy the product?

Reference no: EM132274650

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